CHANDLER, Ariz., Feb. 20, 2020 /PRNewswire/ -- Zovio Inc
(NASDAQ:ZVO), an education technology services company, today
announced the results for its fourth quarter and full year ended
December 31, 2019.
"During 2019, we made substantial progress as we transition
Zovio to an education technology services company. At the same
time, new enrollment for the fourth quarter of 2019 exceeded our
expectations, while Ashford's annual cohort retention rate
increased meaningfully as of December 31,
2019, over the prior year. In addition, our Education
Partnership programs continue to flourish. The support and
sponsorship of their employees by our corporate partners is a
testament that the marketplace believes in the strength and quality
of the programs offered through Ashford
University," commented Andrew
Clark, Founder, President and Chief Executive Officer.
Financial Results for the Three Months Ended
December 31, 2019
Revenue for the three months ended December 31, 2019 was
$96.3 million, compared with revenue
of $94.7 million for the three months
ended December 31, 2018.
Operating loss for the three months ended December 31, 2019
was $21.2 million, compared with
operating loss of $13.6 million for
the three months ended December 31, 2018.
The Company recognized an income tax expense of approximately
$1.8 million for the three months
ended December 31, 2019, compared with income tax benefit of
$35,000 for the three months ended
December 31, 2018.
Net loss for the three months ended December 31, 2019 was
$23.0 million, compared with net loss
of $13.4 million for the three months
ended December 31, 2018.
Diluted loss per share for the three months ended
December 31, 2019 was $0.76,
compared with diluted loss per share of $0.49 for the three months ended
December 31, 2018.
Non-GAAP Financial Results for the Three Months Ended
December 31, 2019
Non-GAAP operating loss for the three months ended
December 31, 2019 was $4.4
million, compared with non-GAAP operating loss of
$6.4 million for the three months
ended December 31, 2018. Non-GAAP operating loss for the three
months ended December 31, 2019 excludes restructuring and
impairment charges of $13.6 million, separation transaction costs
of $0.9 million and acquisition
costs of $2.4 million. Non-GAAP
operating loss for the three months ended December 31, 2018
excludes restructuring and impairment charges of $4.0 million and separation transaction costs of
$3.2 million.
Non-GAAP net loss for the three months ended December 31,
2019 was $4.5 million, compared with
non-GAAP net loss of $6.2 million for
the three months ended December 31, 2018. Non-GAAP net loss
for the three months ended December 31, 2019 excludes
restructuring and impairment charges of $13.6 million, separation transaction costs
of $0.9 million and acquisition
costs of $2.4 million, and the
related tax effects. Non-GAAP net loss for the three months ended
December 31, 2018 excludes restructuring and impairment
charges of $4.0 million and
separation transaction costs of $3.2 million, and the related tax
effects.
Non-GAAP diluted loss per share for the three months ended
December 31, 2019 was $0.15,
compared with non-GAAP diluted loss per share of $0.23 for the three months ended
December 31, 2018.
Financial Results for the Year Ended December 31,
2019
Revenue for the year ended December 31, 2019 was
$417.8 million, compared with revenue
of $443.4 million for the year ended
December 31, 2018.
Operating loss for the year ended December 31, 2019 was
$56.6 million, compared with
operating loss of $4.0 million for
the year ended December 31, 2018.
The Company recognized an income tax benefit of $0.8 million for the year ended December 31,
2019, compared with income tax benefit of $7.6 million for the year ended December 31,
2018.
Net loss for the year ended December 31, 2019 was
$54.8 million, compared with net
income of $4.6 million for the year
ended December 31, 2018.
Diluted loss per share for the year ended December 31, 2019
was $1.86, compared with diluted
income per share of $0.17 for the
year ended December 31, 2018.
Non-GAAP Financial Results for the Year Ended
December 31, 2019
Non-GAAP operating loss for the year ended December 31,
2019 was $15.0 million, compared with
non-GAAP operating income of $12.0
million for the year ended December 31, 2018. Non-GAAP
operating loss for the year ended December 31, 2019 excludes
restructuring and impairment charges of $21.5 million, separation transaction costs of
$5.8 million, acquisition costs of
$14.1 million and other non-GAAP
costs of $0.2 million. Non-GAAP
operating income for the year ended December 31, 2018 excludes
a legal settlement expense of $0.1
million, restructuring and impairment charges of
$7.8 million and separation
transaction costs of $8.1
million.
Non-GAAP net loss for the year ended December 31, 2019 was
$13.9 million, compared with non-GAAP
net income of $13.0 million for the
year ended December 31, 2018. Non-GAAP net loss for the year
ended December 31, 2019 excludes restructuring and impairment
charges of $21.5 million, separation
transaction costs of $5.8 million,
acquisition costs of $14.1 million,
other non-GAAP costs of $0.2 million, and the related tax effects.
Non-GAAP net income for the year ended December 31, 2018
excludes a legal settlement expense of $0.1
million, restructuring and impairment charges of
$7.8 million, separation
transaction costs of $8.1 million,
and the related tax effects.
Non-GAAP diluted loss per share for the year ended
December 31, 2019 was $0.47,
compared with non-GAAP diluted income per share of $0.47 for the year ended December 31, 2018.
Balance Sheet and Cash Flow
As of December 31, 2019, the Company had combined cash and
cash equivalents of $69.3 million as
compared to $166.3 million as of
December 31, 2018.
The Company used $46.1 million of
cash in operating activities during the year ended
December 31, 2019, compared with $7.6
million of cash used in operating activities during the year
ended December 31, 2018.
Student Enrollment
Total student enrollment at Ashford
University was 34,722 at December 31, 2019, compared
with total student enrollment of 38,153 at December 31,
2018.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for
non-GAAP operating income (loss), non-GAAP net income (loss),
non-GAAP diluted income (loss) per share, EBITDA and Adjusted
EBITDA. These non-GAAP measures exclude legal settlement expense,
restructuring and impairment charges, separation transaction costs,
acquisition costs, other non-GAAP costs, as well as certain income
tax adjustments, as applicable. These non-GAAP financial measures
are not prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") and are not based on a comprehensive
set of accounting rules. Management believes non-GAAP financial
measures are useful in providing investors with an understanding of
how specific line items in the consolidated statements of income
are affected by items that may not be indicative of the operating
results of the Company's core business. To the extent that other
companies use similar methods in calculating and reporting non-GAAP
operating results, the Company believes provision of supplemental
non-GAAP financial information allows for a meaningful comparison
of the Company's performance against the performance of other
companies. The Company further believes that these non-GAAP
financial measures provide useful information regarding its ongoing
operating activities and business trends related to its results of
operations, as well as a meaningful comparison with historical
financial results. The Company's management and board of directors
utilize these non-GAAP financial measures, together with the
Company's financial statements prepared in accordance with GAAP, in
developing operating budgets and evaluating the Company's
performance. These non-GAAP financial measures are intended to
supplement GAAP financial information, and should not be considered
as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. In addition, these
non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies. Refer to the
accompanying tables for a detailed reconciliation of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures.
Earnings Conference Call and Webcast
Zovio Inc will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss its
latest financial results and recent highlights. The dial-in number
for callers in the United States
is (877) 395-6119, and the dial-in number for other callers is
(647) 689-5537. The access code for all callers is 9166989. A live
broadcast of the call will also be available on the Company's
website at http://ir.zovio.com.
About Zovio Inc
Zovio Inc (NASDAQ: ZVO) is an education technology services
company that partners with higher education institutions and
employers to deliver innovative, personalized solutions to help
learners and leaders achieve their aspirations. The Zovio network,
which includes Fullstack Academy, TutorMe, and Learn@Forbes,
leverages its core strengths and applies its technology and
capabilities to priority market needs. Using advanced data and
analytics, Zovio identifies the most meaningful ways to enhance the
learner experience and deliver strong outcomes for higher education
institutions, employers, and learners. Zovio's purpose is to help
everyone be in a class of their own. For more information, visit
www.zovio.com.
Forward-Looking Statements
This news release may contain forward-looking statements which
are not statements of historical fact and are subject to the Safe
Harbor provisions created by the Private Securities Litigation
Reform Act of 1995, including, without limitation, statements
regarding management's intentions, hopes, beliefs or expectations,
and statements regarding the Company's outlook for the remainder of
2020 and beyond. These forward-looking statements are based on
current information and expectations and are subject to various
risks and uncertainties. The Company's actual performance or
results may differ materially from those expressed in or suggested
by such statements due to various factors, including without
limitation: our ability to successfully transition to being an
education technology services company, and the success of our
strategies with respect to student initiatives.
Additional information on factors that could cause actual plans
implemented and actual results achieved to differ materially from
those set forth in the forward-looking statements is included from
time to time in the Company's filings with the Securities and
Exchange Commission ("SEC"), including, but not limited to, the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 to be filed with
the SEC on February 20, 2020, the
Company's quarterly reports on Form 10-Q and the Company's current
reports on Form 8-K which are available at www.zovio.com. 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, expectations or other factors affecting such
forward-looking statements, except to the extent required by
applicable securities laws.
Contact: Alanna Vitucci
alanna.vitucci@zovio.com
858 668 2586 x11636
ZOVIO INC
|
Consolidated
Statements of Income (Loss)
|
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
$
|
96,285
|
|
|
$
|
94,713
|
|
|
$
|
417,795
|
|
|
$
|
443,373
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs
and services
|
51,298
|
|
|
51,580
|
|
|
209,730
|
|
|
217,700
|
|
Admissions advisory
and marketing
|
36,071
|
|
|
38,780
|
|
|
170,791
|
|
|
168,751
|
|
General and
administrative
|
16,565
|
|
|
13,952
|
|
|
72,406
|
|
|
52,980
|
|
Legal settlement
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Restructuring and
impairment charges
|
13,575
|
|
|
3,999
|
|
|
21,465
|
|
|
7,794
|
|
Total costs and
expenses
|
117,509
|
|
|
108,311
|
|
|
474,392
|
|
|
447,366
|
|
Operating
loss
|
(21,224)
|
|
|
(13,598)
|
|
|
(56,597)
|
|
|
(3,993)
|
|
Other income (loss),
net
|
(25)
|
|
|
148
|
|
|
1,015
|
|
|
1,047
|
|
Loss before income
taxes
|
(21,249)
|
|
|
(13,450)
|
|
|
(55,582)
|
|
|
(2,946)
|
|
Income tax expense
(benefit)
|
1,766
|
|
|
(35)
|
|
|
(770)
|
|
|
(7,582)
|
|
Net income
(loss)
|
$
|
(23,015)
|
|
|
$
|
(13,415)
|
|
|
$
|
(54,812)
|
|
|
$
|
4,636
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.76)
|
|
|
$
|
(0.49)
|
|
|
$
|
(1.86)
|
|
|
$
|
0.17
|
|
Diluted
|
$
|
(0.76)
|
|
|
$
|
(0.49)
|
|
|
$
|
(1.86)
|
|
|
$
|
0.17
|
|
Weighted average
number of common shares outstanding used in computing income (loss)
per share:
|
|
|
|
|
|
|
|
Basic
|
30,270
|
|
|
27,144
|
|
|
29,492
|
|
|
27,135
|
|
Diluted
|
30,270
|
|
|
27,144
|
|
|
29,492
|
|
|
27,563
|
|
ZOVIO INC
|
Consolidated
Balance Sheets
|
(In
thousands)
|
|
|
As of December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
69,280
|
|
|
$
|
166,307
|
|
Restricted
cash
|
23,257
|
|
|
18,619
|
|
Investments
|
2,502
|
|
|
2,068
|
|
Accounts receivable,
net
|
34,951
|
|
|
27,015
|
|
Prepaid expenses and
other current assets
|
20,524
|
|
|
18,255
|
|
Total current
assets
|
150,514
|
|
|
232,264
|
|
Property and
equipment, net
|
34,294
|
|
|
16,860
|
|
Operating lease
assets
|
18,615
|
|
|
—
|
|
Goodwill and
intangibles, net
|
44,419
|
|
|
12,441
|
|
Other long-term
assets
|
2,296
|
|
|
7,927
|
|
Total
assets
|
$
|
250,138
|
|
|
$
|
269,492
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
68,160
|
|
|
$
|
62,792
|
|
Deferred revenue and
student deposits
|
55,284
|
|
|
63,834
|
|
Total current
liabilities
|
123,444
|
|
|
126,626
|
|
Rent
liability
|
22,409
|
|
|
3,183
|
|
Lease financing
obligation
|
—
|
|
|
8,634
|
|
Other long-term
liabilities
|
5,347
|
|
|
3,435
|
|
Total
liabilities
|
151,200
|
|
|
141,878
|
|
Total stockholders'
equity
|
98,938
|
|
|
127,614
|
|
Total liabilities and
stockholders' equity
|
$
|
250,138
|
|
|
$
|
269,492
|
|
ZOVIO INC
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
(54,812)
|
|
|
$
|
4,636
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
Provision for bad
debts
|
16,252
|
|
|
22,834
|
|
Depreciation and
amortization
|
10,229
|
|
|
6,786
|
|
Deferred income
taxes
|
(36)
|
|
|
(19)
|
|
Stock-based
compensation
|
12,340
|
|
|
4,787
|
|
Noncash lease
expense
|
19,261
|
|
|
—
|
|
Net loss (gain) on
marketable securities
|
(308)
|
|
|
89
|
|
Reassessment of lease
charges
|
558
|
|
|
2,943
|
|
Loss on disposal or
impairment of fixed assets
|
208
|
|
|
1,406
|
|
Loss on impairment of
goodwill and intangibles
|
670
|
|
|
495
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(18,537)
|
|
|
(27,007)
|
|
Prepaid
expenses and other current assets
|
3,874
|
|
|
4,133
|
|
Other long-term
assets
|
(7)
|
|
|
2,843
|
|
Accounts
payable and accrued liabilities
|
1,939
|
|
|
(12,190)
|
|
Deferred
revenue and student deposits
|
(11,099)
|
|
|
(6,598)
|
|
Operating lease
liabilities
|
(22,967)
|
|
|
—
|
|
Other
liabilities
|
(3,651)
|
|
|
(12,729)
|
|
Net cash used in
operating activities
|
(46,086)
|
|
|
(7,591)
|
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
(31,029)
|
|
|
(2,581)
|
|
Purchases of
investments
|
(126)
|
|
|
(1,067)
|
|
Capitalized costs for
intangible assets
|
(750)
|
|
|
(873)
|
|
Cash paid for
acquisitions, net of cash acquired
|
(19,489)
|
|
|
—
|
|
Sales of
investments
|
—
|
|
|
975
|
|
Net cash used in
investing activities
|
(51,394)
|
|
|
(3,546)
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
exercise of stock options
|
60
|
|
|
455
|
|
Tax withholdings
related to net exercise of stock options
|
—
|
|
|
(1,097)
|
|
Proceeds from the
issuance of stock under employee stock purchase plan
|
192
|
|
|
210
|
|
Tax withholding on
issuance of stock awards
|
(819)
|
|
|
(949)
|
|
Repurchase of common
stock
|
—
|
|
|
(2,424)
|
|
Net cash used in
financing activities
|
(567)
|
|
|
(3,805)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(98,047)
|
|
|
(14,942)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
190,584
|
|
|
205,526
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
92,537
|
|
|
$
|
190,584
|
|
ZOVIO INC
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating
Income (Loss) Reconciliation:
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
(21,224)
|
|
|
$
|
(13,598)
|
|
|
$
|
(56,597)
|
|
|
$
|
(3,993)
|
|
Legal settlement
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Restructuring and
impairment charges
|
13,575
|
|
|
3,999
|
|
|
21,465
|
|
|
7,794
|
|
Separation transaction
costs
|
874
|
|
|
3,247
|
|
|
5,832
|
|
|
8,081
|
|
Acquisition
costs
|
2,404
|
|
|
—
|
|
|
14,111
|
|
|
—
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
238
|
|
|
—
|
|
Non-GAAP operating
income (loss)
|
$
|
(4,371)
|
|
|
$
|
(6,352)
|
|
|
$
|
(14,951)
|
|
|
$
|
12,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Reconciliation:
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(23,015)
|
|
|
$
|
(13,415)
|
|
|
$
|
(54,812)
|
|
|
$
|
4,636
|
|
Legal settlement
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Restructuring and
impairment charges
|
13,575
|
|
|
3,999
|
|
|
21,465
|
|
|
7,794
|
|
Separation transaction
costs
|
874
|
|
|
3,247
|
|
|
5,832
|
|
|
8,081
|
|
Acquisition
costs
|
2,404
|
|
|
—
|
|
|
14,111
|
|
|
—
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
238
|
|
|
—
|
|
Income tax impact,
non-GAAP
|
1,663
|
|
|
(38)
|
|
|
(750)
|
|
|
(7,685)
|
|
Non-GAAP net income
(loss)
|
$
|
(4,499)
|
|
|
$
|
(6,207)
|
|
|
$
|
(13,916)
|
|
|
$
|
12,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Income
(Loss) Per Share Reconciliation:
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per share
|
$
|
(0.76)
|
|
|
$
|
(0.49)
|
|
|
$
|
(1.86)
|
|
|
$
|
0.17
|
|
Legal settlement
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
Restructuring and
impairment charges
|
0.45
|
|
|
0.15
|
|
|
0.73
|
|
|
0.28
|
|
Separation transaction
costs
|
0.03
|
|
|
0.12
|
|
|
0.20
|
|
|
0.29
|
|
Acquisition
costs
|
0.08
|
|
|
—
|
|
|
0.48
|
|
|
—
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Income tax impact,
non-GAAP
|
0.05
|
|
|
(0.01)
|
|
|
(0.03)
|
|
|
(0.28)
|
|
Non-GAAP diluted
income (loss) per share
|
$
|
(0.15)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.47)
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
ZOVIO INC
|
Reconciliation of
GAAP to Non-GAAP Financial Measures (continued)
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
EBITDA and
Adjusted EBITDA Reconciliation:
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(23,015)
|
|
|
$
|
(13,415)
|
|
|
$
|
(54,812)
|
|
|
$
|
4,636
|
|
Income tax
benefit
|
1,766
|
|
|
(35)
|
|
|
(770)
|
|
|
(7,582)
|
|
Interest (income)
expense, net
|
(91)
|
|
|
(310)
|
|
|
(910)
|
|
|
(229)
|
|
Depreciation and
amortization
|
3,055
|
|
|
1,586
|
|
|
10,229
|
|
|
6,786
|
|
EBITDA
|
(18,285)
|
|
|
(12,174)
|
|
|
(46,263)
|
|
|
3,611
|
|
Legal settlement
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Restructuring and
impairment charges
|
13,575
|
|
|
3,999
|
|
|
21,465
|
|
|
7,794
|
|
Separation transaction
costs
|
874
|
|
|
3,247
|
|
|
5,832
|
|
|
8,081
|
|
Acquisition
costs
|
2,404
|
|
|
—
|
|
|
14,111
|
|
|
—
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
238
|
|
|
—
|
|
Income tax impact,
non-GAAP
|
1,663
|
|
|
(38)
|
|
|
(750)
|
|
|
(7,685)
|
|
Adjusted
EBITDA
|
$
|
231
|
|
|
$
|
(4,966)
|
|
|
$
|
(5,367)
|
|
|
$
|
11,942
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/zovio-inc-reports-fourth-quarter-and-full-year-2019-results-301008691.html
SOURCE Zovio