CHANDLER, Ariz., July 28, 2021 /PRNewswire/ -- Zovio Inc
(NASDAQ: ZVO), an education technology services company, today
announced its results for the three and six months ended
June 30, 2021.
"We delivered second quarter 2021 results in-line with our
expectations, despite the continued enrollment headwinds many
higher education institutions are experiencing," commented
George Pernsteiner, Zovio Board
Chair and Interim CEO. "Our growth segment continues to deliver
exceptional performance as both Fullstack and TutorMe added new
partners during the quarter. In addition, the actions we have taken
to strengthen Zovio operationally, as well as our efforts to
advance our partnership with the University of
Arizona Global Campus, will undoubtedly better position the
Company for improved performance and long-term growth."
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 June 30,
2021
Revenue and other revenue for the three months ended
June 30, 2021 was $69.2 million,
compared with revenue and other revenue of $103.9 million for the three months ended
June 30, 2020.
Operating loss for the three months ended June 30, 2021 was
$4.5 million, compared with operating
income of $5.3 million for the three
months ended June 30, 2020.
Net loss for the three months ended June 30, 2021 was
$4.0 million, compared with net
income of $5.1 million for the three
months ended June 30, 2020.
Diluted loss per share for the three months ended June 30,
2021 was $0.12, compared with diluted
income per share of $0.16 for the
three months ended June 30, 2020.
The Company recognized an income tax benefit of approximately
$0.2 million for the three months
ended June 30, 2021, compared with an income tax expense of
$0.3 million for the three months
ended June 30, 2020.
Non-GAAP Financial Results for the Three Months Ended
June 30, 2021
Non-GAAP operating loss for the three months ended June 30,
2021 was $1.0 million, compared with
non-GAAP operating income of $7.7
million for the three months ended June 30, 2020.
Non-GAAP operating loss for the three months ended June 30,
2021 excludes restructuring and impairment costs of $2.3 million, separation transaction costs
of $0.3 million, acquisition costs of
$0.5 million and non-GAAP stock
compensation of $0.4 million.
Non-GAAP operating loss 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 a reversal of
acquisition costs of $0.6
million.
Non-GAAP net loss for the three months ended June 30, 2021
was $0.8 million, compared with
non-GAAP net income of $8.0 million
for the three months ended June 30, 2020. Non-GAAP net loss
for the three months ended June 30, 2021 excludes
restructuring and impairment costs of $2.3
million, separation transaction costs of $0.3 million, acquisition costs of $0.5 million, non-GAAP stock compensation of
$0.4 million and income tax
benefit of $0.3 million. 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, a reversal of acquisition costs of
$0.6 million, and income tax expense
of $0.4 million.
Non-GAAP diluted loss per share for the three months ended
June 30, 2021 was $0.02,
compared with non-GAAP diluted income per share of $0.24 for the three months ended June 30,
2020.
Financial Results for the Six Months Ended June 30,
2021
Revenue and other revenue for the six months ended June 30,
2021 was $146.0 million, compared
with revenue and other revenue of $201.8
million for the six months ended June 30, 2020.
Operating loss for the six months ended June 30, 2021 was
$13.8 million, compared with
operating loss of $5.2 million for
the six months ended June 30, 2020.
Net loss for the six months ended June 30, 2021 was
$13.5 million, compared with net
income of $7.2 million for the six
months ended June 30, 2020.
Diluted loss per share for the six months ended June 30,
2021 was $0.41, compared with diluted
income per share of $0.23 for the six
months ended June 30, 2020.
The Company recognized an income tax benefit of $0.1 million for the six months ended
June 30, 2021, compared with an income tax benefit of
$12.5 million for the six months
ended June 30, 2020.
Non-GAAP Financial Results for the Six Months Ended
June 30, 2021
Non-GAAP operating loss for the six months ended June 30,
2021 was $4.1 million, compared with
non-GAAP operating income of $5.0
million for the six months ended June 30, 2020.
Non-GAAP operating loss for the six months ended June 30, 2021
excludes restructuring and impairment expense of $2.3 million, separation transaction costs of
$1.1 million, acquisition costs of
$1.3 million, non-GAAP stock
compensation of $0.4 million and
severance costs of $4.6 million.
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 acquisition costs of
$2.9 million.
Non-GAAP net loss for the six months ended June 30, 2021
was $4.1 million, compared with
non-GAAP net income of $4.8
million for the six months ended June 30, 2020.
Non-GAAP net loss for the six months ended June 30, 2021
excludes restructuring and impairment expense of $2.3 million, separation transaction costs of
$1.1 million, acquisition costs of
$1.3 million, non-GAAP stock
compensation of $0.4 million,
severance costs of $4.6 million and
income tax benefit of $0.3 million.
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
of $2.9 million and income tax
benefit of $12.6 million.
Non-GAAP diluted loss per share for the six months ended
June 30, 2021 was $0.12,
compared with non-GAAP diluted income per share of $0.15 for the six months ended June 30,
2020.
Balance Sheet and Cash Flow
As of June 30, 2021, the Company had combined cash and cash
equivalents of $24.0 million,
compared with combined cash and cash equivalents of $35.5 million as of December 31, 2020.
The Company used $16.3 million of
cash in operating activities during the six months ended
June 30, 2021, compared with $6.7
million of cash provided by operating activities during the
six months ended June 30, 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, certain stock compensation, 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 8439024. 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
June 30 ,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
University Partners
segment
revenue
|
$
|
62,254
|
|
|
$
|
98,962
|
|
|
$
|
131,933
|
|
|
$
|
192,828
|
|
|
Zovio Growth
segment
revenue
|
6,932
|
|
|
4,978
|
|
|
14,112
|
|
|
8,984
|
|
|
Revenue and other
revenue
|
$
|
69,186
|
|
|
$
|
103,940
|
|
|
$
|
146,045
|
|
|
$
|
201,812
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Technology and
academic
services
|
$
|
18,056
|
|
|
$
|
17,209
|
|
|
$
|
37,200
|
|
|
$
|
35,737
|
|
|
Counseling services
and
support
|
23,173
|
|
|
23,540
|
|
|
48,498
|
|
|
46,859
|
|
|
Marketing and
communication
|
21,729
|
|
|
21,675
|
|
|
47,560
|
|
|
46,743
|
|
|
General and
administrative
|
8,376
|
|
|
11,581
|
|
|
24,272
|
|
|
24,968
|
|
|
University-related
expenses
|
—
|
|
|
24,167
|
|
|
—
|
|
|
49,469
|
|
|
Restructuring and
impairment
expense
|
2,341
|
|
|
483
|
|
|
2,341
|
|
|
3,246
|
|
|
Total costs and
expenses
|
73,675
|
|
|
98,655
|
|
|
159,871
|
|
|
207,022
|
|
|
Operating income
(loss)
|
(4,489)
|
|
|
5,285
|
|
|
(13,826)
|
|
|
(5,210)
|
|
|
Other income
(loss),
net
|
232
|
|
|
161
|
|
|
159
|
|
|
(101)
|
|
|
Income (loss) before
income
taxes
|
(4,257)
|
|
|
5,446
|
|
|
(13,667)
|
|
|
(5,311)
|
|
|
Income tax
expense
(benefit)
|
(224)
|
|
|
299
|
|
|
(141)
|
|
|
(12,478)
|
|
|
Net income
(loss)
|
$
|
(4,033)
|
|
|
$
|
5,147
|
|
|
$
|
(13,526)
|
|
|
$
|
7,167
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.12)
|
|
|
$
|
0.16
|
|
|
$
|
(0.41)
|
|
|
$
|
0.23
|
|
|
Diluted
|
$
|
(0.12)
|
|
|
$
|
0.16
|
|
|
$
|
(0.41)
|
|
|
$
|
0.23
|
|
|
Weighted average
number of common shares
outstanding used in computing income (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
33,343
|
|
|
32,137
|
|
|
33,058
|
|
|
31,238
|
|
|
Diluted
|
33,343
|
|
|
32,501
|
|
|
33,058
|
|
|
31,495
|
|
|
ZOVIO INC
|
|
Condensed
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
June 30,
2021
|
|
December
31,
2020
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
23,981
|
|
|
$
|
35,462
|
|
|
Restricted
cash
|
13,283
|
|
|
20,035
|
|
|
Investments
|
1,476
|
|
|
1,515
|
|
|
Accounts receivable,
net
|
7,922
|
|
|
7,204
|
|
|
Prepaid expenses and
other current assets
|
13,231
|
|
|
12,617
|
|
|
Total current
assets
|
59,893
|
|
|
76,833
|
|
|
Property and
equipment, net
|
28,615
|
|
|
30,575
|
|
|
Operating lease
assets
|
31,388
|
|
|
20,114
|
|
|
Goodwill and
intangibles, net
|
30,433
|
|
|
31,785
|
|
|
Other long-term
assets
|
3,566
|
|
|
1,999
|
|
|
Total
assets
|
$
|
153,895
|
|
|
$
|
161,306
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
51,439
|
|
|
$
|
62,693
|
|
|
Deferred revenue and
student deposits
|
10,582
|
|
|
8,090
|
|
|
Total current
liabilities
|
62,021
|
|
|
70,783
|
|
|
Rent
liability
|
36,523
|
|
|
24,125
|
|
|
Other long-term
liabilities
|
8,243
|
|
|
7,181
|
|
|
Total
liabilities
|
106,787
|
|
|
102,089
|
|
|
Total stockholders'
equity
|
47,108
|
|
|
59,217
|
|
|
Total liabilities and
stockholders' equity
|
$
|
153,895
|
|
|
$
|
161,306
|
|
|
ZOVIO
INC
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
Six Months Ended
June 30 ,
|
|
2021
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
$
|
(13,526)
|
|
|
$
|
7,167
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating
activities:
|
|
|
|
|
Provision for bad
debts
|
911
|
|
|
6,402
|
|
|
Depreciation and
amortization
|
4,262
|
|
|
5,883
|
|
|
Deferred income
taxes
|
—
|
|
|
(4)
|
|
|
Stock-based
compensation
|
2,629
|
|
|
4,940
|
|
|
Noncash lease
expense
|
4,367
|
|
|
6,427
|
|
|
Net loss (gain) on
marketable securities
|
(144)
|
|
|
117
|
|
|
Loss (gain) on
disposal or impairment of fixed assets
|
61
|
|
|
—
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(1,628)
|
|
|
(13,598)
|
|
|
Prepaid expenses and
other current assets
|
(614)
|
|
|
301
|
|
|
Other long-term
assets
|
(1,568)
|
|
|
6
|
|
|
Accounts payable and
accrued liabilities
|
(9,198)
|
|
|
(9,139)
|
|
|
Deferred revenue and
student deposits
|
2,491
|
|
|
6,781
|
|
|
Operating lease
liabilities
|
(5,243)
|
|
|
(6,409)
|
|
|
Other
liabilities
|
940
|
|
|
(2,158)
|
|
|
Net cash
provided by (used in) operating activities
|
(16,260)
|
|
|
6,716
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(733)
|
|
|
(1,570)
|
|
|
Purchases of
investments
|
(64)
|
|
|
(684)
|
|
|
Capitalized costs for
intangible assets
|
(333)
|
|
|
(146)
|
|
|
Sale of
investments
|
247
|
|
|
1,818
|
|
|
Net cash
used in investing activities
|
(883)
|
|
|
(582)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from the
issuance of stock under employee stock purchase plan
|
76
|
|
|
112
|
|
|
Borrowings from
long-term liabilities
|
—
|
|
|
2,682
|
|
|
Tax withholdings on
issuance of stock awards
|
(1,166)
|
|
|
(382)
|
|
|
Repurchase of common
stock
|
—
|
|
|
(106)
|
|
|
Net cash
provided by (used in) financing activities
|
(1,090)
|
|
|
2,306
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(18,233)
|
|
|
8,440
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
55,497
|
|
|
92,537
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
37,264
|
|
|
$
|
100,977
|
|
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Operating
Income (Loss) Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP operating
income
(loss)
|
$
|
(4,489)
|
|
|
$
|
5,285
|
|
|
$
|
(13,826)
|
|
|
$
|
(5,210)
|
|
|
Restructuring and
impairment
expense
|
2,341
|
|
|
483
|
|
|
2,341
|
|
|
3,246
|
|
|
Separation
transaction
costs
|
285
|
|
|
2,575
|
|
|
1,062
|
|
|
4,096
|
|
|
Acquisition costs,
net
|
513
|
|
|
(612)
|
|
|
1,345
|
|
|
2,878
|
|
|
Non-GAAP stock
compensation
|
367
|
|
|
—
|
|
|
367
|
|
|
—
|
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
4,601
|
|
|
—
|
|
|
Non-GAAP operating
income
(loss)
|
$
|
(983)
|
|
|
$
|
7,731
|
|
|
$
|
(4,110)
|
|
|
$
|
5,010
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(4,033)
|
|
|
$
|
5,147
|
|
|
$
|
(13,526)
|
|
|
$
|
7,167
|
|
|
Restructuring and
impairment
expense
|
2,341
|
|
|
483
|
|
|
2,341
|
|
|
3,246
|
|
|
Separation
transaction
costs
|
285
|
|
|
2,575
|
|
|
1,062
|
|
|
4,096
|
|
|
Acquisition costs,
net
|
513
|
|
|
(612)
|
|
|
1,345
|
|
|
2,878
|
|
|
Non-GAAP stock
compensation
|
367
|
|
|
—
|
|
|
367
|
|
|
—
|
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
4,601
|
|
|
—
|
|
|
Income tax impact,
non-
GAAP
|
(265)
|
|
|
360
|
|
|
(275)
|
|
|
(12,621)
|
|
|
Non-GAAP net
income
(loss)
|
$
|
(792)
|
|
|
$
|
7,953
|
|
|
$
|
(4,085)
|
|
|
$
|
4,766
|
|
|
|
|
|
|
|
|
|
|
Diluted Income
(Loss) Per Share Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per
share
|
$
|
(0.12)
|
|
|
$
|
0.16
|
|
|
$
|
(0.41)
|
|
|
$
|
0.23
|
|
|
Restructuring and
impairment
expense
|
0.07
|
|
|
0.01
|
|
|
0.07
|
|
|
0.10
|
|
|
Separation
transaction
costs
|
0.01
|
|
|
0.08
|
|
|
0.03
|
|
|
0.13
|
|
|
Acquisition costs,
net
|
0.02
|
|
|
(0.02)
|
|
|
0.05
|
|
|
0.09
|
|
|
Non-GAAP stock
compensation
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
0.14
|
|
|
—
|
|
|
Income tax impact,
non-
GAAP
|
(0.01)
|
|
|
0.01
|
|
|
(0.01)
|
|
|
(0.40)
|
|
|
Non-GAAP diluted
income (loss) per share
|
$
|
(0.02)
|
|
|
$
|
0.24
|
|
|
$
|
(0.12)
|
|
|
$
|
0.15
|
|
|
ZOVIO INC
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures (continued)
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(4,033)
|
|
|
$
|
5,147
|
|
|
$
|
(13,526)
|
|
|
$
|
7,167
|
|
|
Interest expense
(income), net
|
(232)
|
|
|
(161)
|
|
|
(159)
|
|
|
101
|
|
|
Income tax expense
(benefit)
|
(224)
|
|
|
299
|
|
|
(141)
|
|
|
(12,478)
|
|
|
Depreciation and
amortization
|
1,977
|
|
|
2,905
|
|
|
4,262
|
|
|
5,883
|
|
|
EBITDA
|
(2,512)
|
|
|
8,190
|
|
|
(9,564)
|
|
|
673
|
|
|
Restructuring and
impairment expense
|
2,341
|
|
|
483
|
|
|
2,341
|
|
|
3,246
|
|
|
Separation transaction
costs
|
285
|
|
|
2,575
|
|
|
1,062
|
|
|
4,096
|
|
|
Acquisition costs,
net
|
—
|
|
|
(1,444)
|
|
|
—
|
|
|
1,215
|
|
|
Non-GAAP stock
compensation
|
367
|
|
|
—
|
|
|
367
|
|
|
—
|
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
4,601
|
|
|
—
|
|
|
Adjusted
EBITDA
|
$
|
481
|
|
|
$
|
9,804
|
|
|
$
|
(1,193)
|
|
|
$
|
9,230
|
|
Contact: Vickie Schray
vickie.schray@zovio.com
866 475 0317 x10003
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SOURCE Zovio
