CHANDLER, Ariz., Aug. 3, 2020 /PRNewswire/ -- Zovio Inc (NASDAQ:
ZVO), an education technology services company, today announced its
results for the three and six months ended June 30, 2020.
"Our team executed exceptionally well in the second quarter
of 2020, driving new enrollment ahead of our expectations. We also
saw tremendous progress with our growing platform of innovative
software and services to support learners. University partners
continue to see the value of Fullstack and TutorMe's offerings,
together adding 35 new partners during the quarter. Further,
TutorMe saw triple-digit increases in consumer and partnership
usage from the prior year, while Learn@Forbes substantially
increased active subscribers," commented Andrew Clark, Founder, President and Chief
Executive Officer. "Today marks the start of Zovio's next
chapter as a world-class education technology services company, as
we announced jointly with the University of
Arizona its intent to create a new, non-profit entity that
will bear the name of The University of
Arizona Global Campus and will acquire Ashford University. The University of Arizona Global Campus, which will be
powered by Zovio's innovative solutions that personalize each
student's individual learning experience, will be a fully online
university providing access to affordable high-quality higher
education with flexible opportunities to students from diverse
backgrounds to achieve their educational and life
objectives."
Financial Results for the Three Months Ended June 30,
2020
Revenue for the three months ended June 30, 2020 was
$103.9 million, compared with revenue
of $107.5 million for the three
months ended June 30, 2019.
Operating income for the three months ended June 30, 2020
was $5.3 million, compared with
operating loss of $20.3 million for
the three months ended June 30, 2019.
Net income for the three months ended June 30, 2020 was
$5.1 million, compared with net loss
of $17.6 million for the three months
ended June 30, 2019.
Diluted income per share for the three months ended
June 30, 2020 was $0.16,
compared with diluted loss per share of $0.58 for the three months ended June 30,
2019.
The Company recognized an income tax expense of approximately
$0.3 million for the three months
ended June 30, 2020, compared with an income tax benefit of
$2.4 million for the three months
ended June 30, 2019.
Non-GAAP Financial Results for the Three Months Ended
June 30, 2020
Non-GAAP operating income for the three months ended
June 30, 2020 was $7.7 million,
compared with non-GAAP operating loss of $4.8 million for the three months ended
June 30, 2019. Non-GAAP operating income for the three months
ended June 30, 2020 excludes restructuring and impairment
expense of $0.5 million, separation
transaction costs of $2.6 million and
net acquisition costs, including income relating to contingent
consideration revaluation, of $0.6
million. Non-GAAP operating loss for the three months ended
June 30, 2019 excludes restructuring and impairment expense of
$5.4 million, and separation
transaction costs of $1.8 million and
acquisition costs of $8.3
million.
Non-GAAP net income for the three months ended June 30,
2020 was $8.0 million, compared with
non-GAAP net loss of $4.6 million for
the three months ended June 30, 2019. Non-GAAP net income for
the three months ended June 30, 2020 excludes restructuring
and impairment expense of $0.5
million, separation transaction costs of $2.6 million, net acquisition costs, including
income relating to contingent consideration revaluation, of
$0.6 million and an income tax
expense of approximately $0.4
million. Non-GAAP net loss for the three months ended
June 30, 2019 excludes restructuring and impairment expense of
$5.4 million, separation transaction
costs of $1.8 million, acquisition
costs of $8.3 million, as well as an
income tax benefit of $2.5 million
for the three months ended June 30, 2019.
Non-GAAP diluted income per share for the three months ended
June 30, 2020 was $0.24,
compared with non-GAAP diluted loss per share of $0.15 for the three months ended June 30,
2019.
Financial Results for the Six Months Ended June 30,
2020
Revenue for the six months ended June 30, 2020 was
$201.8 million, compared with revenue
of $217.3 million for the six months
ended June 30, 2019.
Operating loss for the six months ended June 30, 2020 was
$5.2 million, compared with operating
loss of $27.5 million for the six
months ended June 30, 2019.
Net income for the six months ended June 30, 2020 was
$7.2 million, compared with net loss
of $24.2 million for the six months
ended June 30, 2019.
Diluted income per share for the six months ended June 30,
2020 was $0.23, compared with diluted
loss per share of $0.84 for the six
months ended June 30, 2019.
The Company recognized an income tax benefit of $12.5 million for the six months ended
June 30, 2020, compared with an income tax benefit of
$2.4 million for the six months ended
June 30, 2019.
Non-GAAP Financial Results for the Six Months Ended
June 30, 2020
Non-GAAP operating income for the six months ended June 30,
2020 was $5.0 million, compared with
non-GAAP operating loss of $8.6
million for the six months ended June 30, 2019.
Non-GAAP operating income for the six months ended June 30,
2020 excludes restructuring and impairment expense of $3.2 million, separation transaction costs of
$4.1 million and net acquisition
costs, including income relating to contingent consideration
revaluation, of $2.9 million.
Non-GAAP operating loss for the six months ended June 30, 2019
excludes restructuring and impairment expense of $5.4 million, separation transaction costs of
$4.0 million, acquisition costs of
$9.2 million, other non-GAAP costs of
$0.2 million.
Non-GAAP net income for the six months ended June 30, 2020
was $4.8 million, compared with
non-GAAP net loss of $7.9
million for the six months ended June 30, 2019.
Non-GAAP net income for the six months ended June 30, 2020
excludes restructuring and impairment expense of $3.2 million, separation transaction costs of
$4.1 million, net acquisition costs,
including income relating to contingent consideration revaluation,
of $2.9 million and an income tax
benefit of $12.6 million. Non-GAAP
net loss for the six months ended June 30, 2019 excludes
restructuring and impairment expense of $5.4
million, separation transaction costs of $4.0 million, acquisition costs of $9.2 million, other non-GAAP costs of
$0.2 million, as well as an income
tax benefit of $2.5 million.
Non-GAAP diluted income per share for the six months ended
June 30, 2020 was $0.15,
compared with non-GAAP diluted loss per share of $0.27 for the six months ended June 30,
2019.
Balance Sheet and Cash Flow
As of June 30, 2020, the Company had combined cash and cash
equivalents of $75.1 million,
compared with combined cash and cash equivalents of $69.3 million as of December 31, 2019.
The Company had $6.7 million of
cash provided by operating activities during the six months ended
June 30, 2020, compared with $22.1
million of cash used in operating activities during the six
months ended June 30, 2019.
Student Enrollment
Total student enrollment at the Company's academic institution
was 34,395 students at June 30, 2020, compared with total
student enrollment of 37,910 at June 30, 2019.
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 restructuring and
impairment expense, separation transaction costs, net 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 (loss)
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 8:00 a.m. Eastern Time (5:00 a.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 1555878. 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, our
ability to complete the separation of Ashford
University to become a stand-alone not-for-profit
organization by June 30, 2020, 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 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
Condensed
Consolidated Statements of Income (Loss)
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
103,940
|
|
|
$
|
107,495
|
|
|
$
|
201,812
|
|
|
$
|
217,259
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs
and services
|
44,874
|
|
|
55,088
|
|
|
91,255
|
|
|
107,026
|
|
Admissions advisory
and marketing
|
38,802
|
|
|
44,810
|
|
|
80,535
|
|
|
93,882
|
|
General and
administrative
|
14,496
|
|
|
22,532
|
|
|
31,986
|
|
|
38,452
|
|
Restructuring and
impairment expense
|
483
|
|
|
5,394
|
|
|
3,246
|
|
|
5,423
|
|
Total costs and
expenses
|
98,655
|
|
|
127,824
|
|
|
207,022
|
|
|
244,783
|
|
Operating income
(loss)
|
5,285
|
|
|
(20,329)
|
|
|
(5,210)
|
|
|
(27,524)
|
|
Other income
(expense), net
|
161
|
|
|
297
|
|
|
(101)
|
|
|
896
|
|
Income (loss) before
income taxes
|
5,446
|
|
|
(20,032)
|
|
|
(5,311)
|
|
|
(26,628)
|
|
Income tax expense
(benefit)
|
299
|
|
|
(2,435)
|
|
|
(12,478)
|
|
|
(2,389)
|
|
Net income
(loss)
|
$
|
5,147
|
|
|
$
|
(17,597)
|
|
|
$
|
7,167
|
|
|
$
|
(24,239)
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.16
|
|
|
$
|
(0.58)
|
|
|
$
|
0.23
|
|
|
$
|
(0.84)
|
|
Diluted
|
$
|
0.16
|
|
|
$
|
(0.58)
|
|
|
$
|
0.23
|
|
|
$
|
(0.84)
|
|
Weighted average
number of common shares outstanding used in computing income (loss)
per share:
|
|
|
|
|
|
|
|
Basic
|
32,137
|
|
|
30,215
|
|
|
31,238
|
|
|
28,706
|
|
Diluted
|
32,501
|
|
|
30,215
|
|
|
31,495
|
|
|
28,706
|
|
ZOVIO INC
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
|
June 30,
2020
|
|
December
31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
75,073
|
|
|
$
|
69,280
|
|
Restricted
cash
|
25,904
|
|
|
23,257
|
|
Investments
|
1,251
|
|
|
2,502
|
|
Accounts receivable,
net
|
42,237
|
|
|
34,951
|
|
Prepaid expenses and
other current assets
|
20,063
|
|
|
20,524
|
|
Total current
assets
|
164,528
|
|
|
150,514
|
|
Property and
equipment, net
|
32,449
|
|
|
34,294
|
|
Operating lease
assets
|
22,965
|
|
|
18,615
|
|
Goodwill and
intangibles, net
|
41,887
|
|
|
44,419
|
|
Other long-term
assets
|
2,291
|
|
|
2,296
|
|
Total
assets
|
$
|
264,120
|
|
|
$
|
250,138
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
58,558
|
|
|
$
|
68,160
|
|
Deferred revenue and
student deposits
|
62,065
|
|
|
55,284
|
|
Total current
liabilities
|
120,623
|
|
|
123,444
|
|
Rent
liability
|
26,871
|
|
|
22,409
|
|
Other long-term
liabilities
|
4,621
|
|
|
5,347
|
|
Total
liabilities
|
152,115
|
|
|
151,200
|
|
Total stockholders'
equity
|
112,005
|
|
|
98,938
|
|
Total liabilities and
stockholders' equity
|
$
|
264,120
|
|
|
$
|
250,138
|
|
ZOVIO
INC
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
7,167
|
|
|
$
|
(24,239)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Provision for bad
debts
|
6,402
|
|
|
7,525
|
|
Depreciation and
amortization
|
5,883
|
|
|
4,198
|
|
Deferred income
taxes
|
(4)
|
|
|
75
|
|
Stock-based
compensation
|
4,940
|
|
|
5,302
|
|
Noncash lease
expense
|
6,427
|
|
|
9,345
|
|
Net loss (gain) on
marketable securities
|
117
|
|
|
(203)
|
|
Reassessment of lease
charges
|
—
|
|
|
558
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(13,598)
|
|
|
(8,579)
|
|
Prepaid expenses and
other current assets
|
301
|
|
|
(1,355)
|
|
Other long-term
assets
|
6
|
|
|
(684)
|
|
Accounts payable and
accrued liabilities
|
(9,139)
|
|
|
7,086
|
|
Deferred revenue and
student deposits
|
6,781
|
|
|
(7,000)
|
|
Operating lease
liabilities
|
(6,409)
|
|
|
(11,517)
|
|
Other
liabilities
|
(2,158)
|
|
|
(2,630)
|
|
Net cash
provided by (used in) operating activities
|
6,716
|
|
|
(22,118)
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(1,570)
|
|
|
(17,767)
|
|
Purchases of
investments
|
(684)
|
|
|
(74)
|
|
Capitalized costs for
intangible assets
|
(146)
|
|
|
(293)
|
|
Cash paid in
acquisition, net of cash acquired
|
—
|
|
|
(19,286)
|
|
Sale of
investments
|
1,818
|
|
|
—
|
|
Net cash
used in investing activities
|
(582)
|
|
|
(37,420)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
exercise of stock options
|
—
|
|
|
60
|
|
Proceeds from the
issuance of stock under employee stock purchase plan
|
112
|
|
|
96
|
|
Borrowings from
long-term liabilities
|
2,682
|
|
|
—
|
|
Tax withholdings on
issuance of stock awards
|
(382)
|
|
|
(806)
|
|
Repurchase of common
stock
|
(106)
|
|
|
—
|
|
Net cash
provided by (used in) financing activities
|
2,306
|
|
|
(650)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
8,440
|
|
|
(60,188)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
92,537
|
|
|
190,584
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
100,977
|
|
|
$
|
130,396
|
|
ZOVIO INC
Reconciliation of
GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Income (Loss) Reconciliation:
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
5,285
|
|
|
$
|
(20,329)
|
|
|
$
|
(5,210)
|
|
|
$
|
(27,524)
|
|
Restructuring and
impairment expense
|
483
|
|
|
5,394
|
|
|
3,246
|
|
|
5,423
|
|
Separation transaction
costs
|
2,575
|
|
|
1,814
|
|
|
4,096
|
|
|
4,008
|
|
Acquisition costs,
net
|
(612)
|
|
|
8,303
|
|
|
2,878
|
|
|
9,223
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
Non-GAAP operating
income (loss)
|
$
|
7,731
|
|
|
$
|
(4,818)
|
|
|
$
|
5,010
|
|
|
$
|
(8,632)
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Reconciliation:
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
5,147
|
|
|
$
|
(17,597)
|
|
|
$
|
7,167
|
|
|
$
|
(24,239)
|
|
Restructuring and
impairment expense
|
483
|
|
|
5,394
|
|
|
3,246
|
|
|
5,423
|
|
Separation transaction
costs
|
2,575
|
|
|
1,814
|
|
|
4,096
|
|
|
4,008
|
|
Acquisition costs,
net
|
(612)
|
|
|
8,303
|
|
|
2,878
|
|
|
9,223
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
Income tax impact,
non-GAAP
|
360
|
|
|
(2,494)
|
|
|
(12,621)
|
|
|
(2,508)
|
|
Non-GAAP net income
(loss)
|
$
|
7,953
|
|
|
$
|
(4,580)
|
|
|
$
|
4,766
|
|
|
$
|
(7,855)
|
|
|
|
|
|
|
|
|
|
Diluted Income
(Loss) Per Share Reconciliation:
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per share
|
$
|
0.16
|
|
|
$
|
(0.58)
|
|
|
$
|
0.23
|
|
|
$
|
(0.84)
|
|
Restructuring and
impairment expense
|
0.01
|
|
|
0.18
|
|
|
0.10
|
|
|
0.19
|
|
Separation transaction
costs
|
0.08
|
|
|
0.06
|
|
|
0.13
|
|
|
0.14
|
|
Acquisition costs,
net
|
(0.02)
|
|
|
0.27
|
|
|
0.09
|
|
|
0.32
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
Income tax impact,
non-GAAP
|
0.01
|
|
|
(0.08)
|
|
|
(0.40)
|
|
|
(0.09)
|
|
Non-GAAP diluted
income (loss) per share
|
$
|
0.24
|
|
|
$
|
(0.15)
|
|
|
$
|
0.15
|
|
|
$
|
(0.27)
|
|
ZOVIO INC
Reconciliation of
GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)
(In
thousands)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
5,147
|
|
|
$
|
(17,597)
|
|
|
$
|
7,167
|
|
|
$
|
(24,239)
|
|
Interest expense
(income), net
|
(161)
|
|
|
(240)
|
|
|
101
|
|
|
(693)
|
|
Income tax expense
(benefit)
|
299
|
|
|
(2,435)
|
|
|
(12,478)
|
|
|
(2,389)
|
|
Depreciation and
amortization
|
2,905
|
|
|
2,699
|
|
|
5,883
|
|
|
4,198
|
|
EBITDA
|
8,190
|
|
|
(17,573)
|
|
|
673
|
|
|
(23,123)
|
|
Restructuring and
impairment expense
|
483
|
|
|
5,394
|
|
|
3,246
|
|
|
5,423
|
|
Separation transaction
costs
|
2,575
|
|
|
1,814
|
|
|
4,096
|
|
|
4,008
|
|
Acquisition
costs
|
(1,444)
|
|
|
7,471
|
|
|
1,215
|
|
|
8,391
|
|
Other non-GAAP
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
Adjusted
EBITDA
|
$
|
9,804
|
|
|
$
|
(2,894)
|
|
|
$
|
9,230
|
|
|
$
|
(5,063)
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/zovio-inc-reports-second-quarter-2020-results-301104322.html
SOURCE Zovio