CHANDLER, Ariz., May 12,
2021 /PRNewswire/ -- Zovio Inc (NASDAQ: ZVO), an education
technology services company, today announced its results for the
three months ended March 31, 2021.
"For the first quarter of 2021, our Zovio Growth segment
generated further momentum delivering nearly 80% top-line growth
year-over-year. At the same time, we continued to advance our
relationship with the University of
Arizona Global Campus, and recently added a new partner in
our University Partners Group segment," commented George Pernsteiner, Zovio Board Chair and
Interim CEO. "As we move forward with our comprehensive search
for Zovio's next leader, we have retained a search firm to
facilitate this process, which we believe will yield the right
blend of vision, industry and operational expertise to advance
Zovio's strategy and deliver shareholder value for years to
come."
On December 1, 2020, the Company
consummated a Sale Transaction in which the Company transferred the
academic and related operations and assets comprising the
University of Arizona Global Campus
("Global Campus"). The Company now provides services to Global
Campus, which include recruiting, financial aid, counseling,
institutional support, information technology, and academic support
services. The Company made changes in its presentation of its
revenue line items and operating expenses and reclassified prior
periods to conform to the current presentation.
Financial Results for the Three Months Ended March 31,
2021
Revenue and other revenue for the three months ended
March 31, 2021 was $76.9
million, compared with revenue and other revenue of
$97.9 million for the three months
ended March 31, 2020.
Operating loss for the three months ended March 31, 2021
was $9.3 million, compared with
operating loss of $10.5 million for
the three months ended March 31, 2020.
Net loss for the three months ended March 31, 2021 was
$9.5 million, compared with net
income of $2.0 million for the three
months ended March 31, 2020.
Diluted loss per share for the three months ended March 31,
2021 was $0.29, compared with diluted
income per share of $0.06 for the
three months ended March 31, 2020.
The Company recognized an income tax expense of approximately
$0.1 million for the three months
ended March 31, 2021, compared with an income tax benefit of
$12.8 million for the three months
ended March 31, 2020.
Non-GAAP Financial Results for the Three Months Ended
March 31, 2021
Non-GAAP operating loss for the three months ended
March 31, 2021 was $3.1 million,
compared with non-GAAP operating loss of $2.7 million for the three months ended
March 31, 2020. Non-GAAP operating loss for the three months
ended March 31, 2021 excludes separation transaction costs of
$0.8 million, acquisition costs of
$0.8 million and severance costs of
$4.6 million. Non-GAAP operating loss
for the three months ended March 31, 2020 excludes
restructuring and impairment expense of $2.8
million, separation transaction costs of $1.5 million and acquisition costs of
$3.5 million.
Non-GAAP net loss for the three months ended March 31, 2021
was $3.3 million, compared with
non-GAAP net loss of $3.2 million for
the three months ended March 31, 2020. Non-GAAP net loss for
the three months ended March 31, 2021 excludes separation
transaction costs of $0.8 million,
acquisition costs of $0.8 million,
severance costs of $4.6 million, and
income tax expense of approximately $10
thousand. Non-GAAP net loss for the three months ended
March 31, 2020 excludes restructuring and impairment expense
of $2.8 million, separation
transaction costs of $1.5 million,
acquisition costs of $3.5 million,
and income tax benefit of $13.0
million.
Non-GAAP diluted loss per share for the three months ended
March 31, 2021 was $0.10,
compared with non-GAAP diluted loss per share of $0.10 for the three months ended March 31,
2020.
Balance Sheet and Cash Flow
As of March 31, 2021, the Company had combined cash and
cash equivalents of $35.1 million, compared with combined cash
and cash equivalents of $35.5 million as of December 31, 2020.
The Company had $0.8 million of
cash provided by operating activities during the three months ended
March 31, 2021, compared with $6.2
million of cash used in operating activities during the
three months ended March 31, 2020.
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, acquisition
costs, severance 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 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 4682767. 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 and TutorMe, 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 2021 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.
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, 2020 filed with the SEC
on February 24, 2021, 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.
ZOVIO INC
Condensed
Consolidated Statements of Income (Loss)
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
March 31 ,
|
|
2021
|
|
2020
|
|
|
|
|
University Partners
segment revenue
|
$
|
69,679
|
|
|
$
|
93,866
|
|
Zovio Growth segment
revenue
|
7,180
|
|
|
4,006
|
|
Revenue and other
revenue
|
$
|
76,859
|
|
|
$
|
97,872
|
|
Costs and
expenses:
|
|
|
|
Technology and
academic services
|
$
|
19,144
|
|
|
$
|
18,528
|
|
Counseling services
and support
|
25,325
|
|
|
23,319
|
|
Marketing and
communication
|
25,831
|
|
|
25,068
|
|
General and
administrative
|
15,896
|
|
|
13,387
|
|
University-related
expenses
|
—
|
|
|
25,302
|
|
Restructuring and
impairment expense
|
—
|
|
|
2,763
|
|
Total costs and
expenses
|
86,196
|
|
|
108,367
|
|
Operating
loss
|
(9,337)
|
|
|
(10,495)
|
|
Other expense,
net
|
(73)
|
|
|
(262)
|
|
Loss before income
taxes
|
(9,410)
|
|
|
(10,757)
|
|
Income tax expense
(benefit)
|
83
|
|
|
(12,777)
|
|
Net income
(loss)
|
$
|
(9,493)
|
|
|
$
|
2,020
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
Basic
|
$
|
(0.29)
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
(0.29)
|
|
|
$
|
0.06
|
|
Weighted average
number of common shares outstanding used in computing
income (loss) per share:
|
|
|
|
Basic
|
32,769
|
|
|
30,340
|
|
Diluted
|
32,769
|
|
|
32,056
|
|
ZOVIO INC
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
|
March 31,
2021
|
|
December
31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
35,052
|
|
|
$
|
35,462
|
|
Restricted
cash
|
20,033
|
|
|
20,035
|
|
Investments
|
1,366
|
|
|
1,515
|
|
Accounts receivable,
net
|
6,831
|
|
|
7,204
|
|
Prepaid expenses and
other current assets
|
15,393
|
|
|
12,617
|
|
Total current
assets
|
78,675
|
|
|
76,833
|
|
Property and
equipment, net
|
29,565
|
|
|
30,575
|
|
Operating lease
assets
|
18,581
|
|
|
20,114
|
|
Goodwill and
intangibles, net
|
30,921
|
|
|
31,785
|
|
Other long-term
assets
|
2,304
|
|
|
1,999
|
|
Total
assets
|
$
|
160,046
|
|
|
$
|
161,306
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
69,038
|
|
|
$
|
62,693
|
|
Deferred revenue and
student deposits
|
8,077
|
|
|
8,090
|
|
Total current
liabilities
|
77,115
|
|
|
70,783
|
|
Rent
liability
|
23,267
|
|
|
24,125
|
|
Other long-term
liabilities
|
8,758
|
|
|
7,181
|
|
Total
liabilities
|
109,140
|
|
|
102,089
|
|
Total stockholders'
equity
|
50,906
|
|
|
59,217
|
|
Total liabilities and
stockholders' equity
|
$
|
160,046
|
|
|
$
|
161,306
|
|
ZOVIO
INC
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
Three Months Ended
March 31 ,
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(9,493)
|
|
|
$
|
2,020
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating
activities:
|
|
|
|
Provision for bad
debts
|
661
|
|
|
3,337
|
|
Depreciation and
amortization
|
2,285
|
|
|
2,978
|
|
Deferred income
taxes
|
—
|
|
|
32
|
|
Stock-based
compensation
|
2,382
|
|
|
4,138
|
|
Noncash lease
expense
|
2,077
|
|
|
3,911
|
|
Net loss (gain) on
marketable securities
|
(68)
|
|
|
326
|
|
Loss (gain) on
disposal or impairment of fixed assets
|
—
|
|
|
(12)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(288)
|
|
|
(15,007)
|
|
Prepaid expenses and
other current assets
|
(2,776)
|
|
|
(7,948)
|
|
Other long-term
assets
|
(305)
|
|
|
(193)
|
|
Accounts payable and
accrued liabilities
|
7,457
|
|
|
(3,168)
|
|
Deferred revenue and
student deposits
|
(13)
|
|
|
7,245
|
|
Operating lease
liabilities
|
(2,598)
|
|
|
(3,672)
|
|
Other
liabilities
|
1,455
|
|
|
(193)
|
|
Net cash
provided by (used in) operating activities
|
776
|
|
|
(6,206)
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(184)
|
|
|
(1,213)
|
|
Purchases of
investments
|
(30)
|
|
|
(36)
|
|
Capitalized costs for
intangible assets
|
(143)
|
|
|
(95)
|
|
Sale of
investments
|
247
|
|
|
—
|
|
Net cash
used in investing activities
|
(110)
|
|
|
(1,344)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings from
long-term liabilities
|
—
|
|
|
1,149
|
|
Tax withholdings on
issuance of stock awards
|
(1,078)
|
|
|
(202)
|
|
Net cash
provided by (used in) financing activities
|
(1,078)
|
|
|
947
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(412)
|
|
|
(6,603)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
55,497
|
|
|
92,537
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
55,085
|
|
|
$
|
85,934
|
|
ZOVIO INC
Reconciliation of
GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
Operating
Income (Loss) Reconciliation:
|
|
|
|
GAAP operating
loss
|
$
|
(9,337)
|
|
|
$
|
(10,495)
|
|
Restructuring and
impairment expense
|
—
|
|
|
2,763
|
|
Separation transaction
costs
|
777
|
|
|
1,522
|
|
Acquisition costs,
net
|
832
|
|
|
3,490
|
|
Severance
costs
|
4,601
|
|
|
—
|
|
Non-GAAP operating
loss
|
$
|
(3,127)
|
|
|
$
|
(2,720)
|
|
|
|
|
|
Net Income
(Loss) Reconciliation:
|
|
|
|
GAAP net income
(loss)
|
$
|
(9,493)
|
|
|
$
|
2,020
|
|
Restructuring and
impairment expense
|
—
|
|
|
2,763
|
|
Separation transaction
costs
|
777
|
|
|
1,522
|
|
Acquisition costs,
net
|
832
|
|
|
3,490
|
|
Severance
costs
|
4,601
|
|
|
—
|
|
Income tax impact,
non-GAAP
|
(10)
|
|
|
(12,981)
|
|
Non-GAAP net
loss
|
$
|
(3,293)
|
|
|
$
|
(3,186)
|
|
|
|
|
|
Diluted Income
(Loss) Per Share Reconciliation:
|
|
|
|
GAAP diluted income
(loss) per share
|
$
|
(0.29)
|
|
|
$
|
0.06
|
|
Restructuring and
impairment expense
|
—
|
|
|
0.09
|
|
Separation transaction
costs
|
0.02
|
|
|
0.05
|
|
Acquisition costs,
net
|
0.03
|
|
|
0.11
|
|
Severance
costs
|
0.14
|
|
|
—
|
|
Income tax impact,
non-GAAP
|
0.00
|
|
|
(0.41)
|
|
Non-GAAP diluted loss
per share
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
ZOVIO INC
Reconciliation of
GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)
(In
thousands)
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
GAAP net income
(loss)
|
$
|
(9,493)
|
|
|
$
|
2,020
|
|
Interest expense
(income), net
|
73
|
|
|
(53)
|
|
Income tax expense
(benefit)
|
83
|
|
|
(12,777)
|
|
Depreciation and
amortization
|
2,285
|
|
|
2,978
|
|
EBITDA
|
(7,052)
|
|
|
(7,832)
|
|
Restructuring and
impairment expense
|
—
|
|
|
2,763
|
|
Separation transaction
costs
|
777
|
|
|
1,522
|
|
Other acquisition
costs
|
—
|
|
|
2,658
|
|
Severance
costs
|
4,601
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
(1,674)
|
|
|
$
|
(889)
|
|
Contact: Alanna Vitucci
alanna.vitucci@zovio.com
858 668 2586 x11636
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SOURCE Zovio