Zovio Inc Reports Fourth Quarter and Full Year 2020 Results
CHANDLER, Ariz., Feb. 24, 2021 /PRNewswire/ -- Zovio Inc (NASDAQ:ZVO), an education technology services company, today announced the results for its fourth quarter and full year ended December 31, 2020.
"We ended the year strong, executing on the sale of the University, delivering triple-digit growth in Zovio Growth and exceeding earnings expectations. Zovio is an enviable position as we embark on this new chapter as a leading education technology services business. Our track record of innovation, driven by advanced data and analytics, strong culture and more than 200 institutional partners will allow us to offer services to our university partners that span the student journey and support the best possible outcomes. As we enter 2021, we remain poised for long-term growth and value-creation as we capture the rapid changes in education to empower all learners," commented Andrew Clark, Founder, President and Chief Executive Officer.
Financial Results for the Three Months Ended December 31, 2020
Revenue and other revenue for the three months ended December 31, 2020 was $93.1 million, compared with revenue of $96.3 million for the three months ended December 31, 2019.
Operating loss for the three months ended December 31, 2020 was $57.3 million, compared with operating loss of $21.2 million for the three months ended December 31, 2019.
The Company recognized an income tax benefit of approximately $0.2 million for the three months ended December 31, 2020, compared with income tax expense of $1.8 million for the three months ended December 31, 2019.
Net loss for the three months ended December 31, 2020 was $57.2 million, compared with net loss of $23.0 million for the three months ended December 31, 2019.
Diluted loss per share for the three months ended December 31, 2020 was $1.75, compared with diluted loss per share of $0.76 for the three months ended December 31, 2019.
Non-GAAP Financial Results for the Three Months Ended December 31, 2020
Non-GAAP operating income for the three months ended December 31, 2020 was $0.9 million, compared with non-GAAP operating loss of $4.4 million for the three months ended December 31, 2019. Non-GAAP operating income for the three months ended December 31, 2020 excludes restructuring and impairment charges of $1.4 million, separation transaction costs of $1.2 million, acquisition costs of $0.9 million and loss on transaction of $54.8 million. 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 net income for the three months ended December 31, 2020 was $0.9 million, compared with non-GAAP net loss of $4.5 million for the three months ended December 31, 2019. Non-GAAP net income for the three months ended December 31, 2020 excludes restructuring and impairment charges of $1.4 million, separation transaction costs of $1.2 million and acquisition costs of $0.9 million, loss on transaction of $54.8 million and the related tax effects. 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, acquisition costs of $2.4 million and the related tax effects.
Non-GAAP diluted income per share for the three months ended December 31, 2020 was $0.03, compared with non-GAAP diluted loss per share of $0.15 for the three months ended December 31, 2019.
Financial Results for the Year Ended December 31, 2020
Revenue and other revenue for the year ended December 31, 2020 was $397.1 million, compared with revenue of $417.8 million for the year ended December 31, 2019.
Operating loss for the year ended December 31, 2020 was $61.9 million, compared with operating loss of $56.6 million for the year ended December 31, 2019.
The Company recognized an income tax benefit of $13.1 million for the year ended December 31, 2020, compared with income tax benefit of $0.8 million for the year ended December 31, 2019.
Net loss for the year ended December 31, 2020 was $49.0 million, compared with net loss of $54.8 million for the year ended December 31, 2019.
Diluted loss per share for the year ended December 31, 2020 was $1.53, compared with diluted loss per share of $1.86 for the year ended December 31, 2019.
Non-GAAP Financial Results for the Year Ended December 31, 2020
Non-GAAP operating income for the year ended December 31, 2020 was $8.8 million, compared with non-GAAP operating loss of $15.0 million for the year ended December 31, 2019. Non-GAAP operating income for the year ended December 31, 2020 excludes restructuring and impairment charges of $4.8 million, separation transaction costs of $6.7 million, acquisition costs of $4.3 million and loss on transaction of $54.8 million. 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 net income for the year ended December 31, 2020 was $8.6 million, compared with non-GAAP net loss of $13.9 million for the year ended December 31, 2019. Non-GAAP net income for the year ended December 31, 2020 excludes restructuring and impairment charges of $4.8 million, separation transaction costs of $6.7 million, acquisition costs of $4.3 million, loss on transaction of $54.8 million, and the related tax effects. 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 diluted income per share for the year ended December 31, 2020 was $0.27, compared with non-GAAP diluted loss per share of $0.47 for the year ended December 31, 2019.
Balance Sheet and Cash Flow
As of December 31, 2020, the Company had cash and cash equivalents of $35.5 million as compared to $69.3 million as of December 31, 2019.
The Company had $25.3 million of cash provided by operating activities during the year ended December 31, 2020, compared with $46.1 million of cash used in operating activities during the year ended December 31, 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 charges, separation transaction costs, acquisition costs, loss on transaction, 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 4834547. 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, 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, 2020 to be 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
Consolidated Statements of Income (Loss)
(In thousands, except per share amounts)
Three Months Ended
Year Ended
December 31,
December 31,
2020 2019 2020 2019
---
University Partners segment
revenue $
87,401 $
92,307 $
376,220 $
407,594
Zovio Growth segment revenue 5,742 3,978 20,901 10,201
Revenue and other revenue 93,143 96,285 397,121 417,795
Costs and expenses:
Technology and academic
services 19,591 17,944 74,412 73,342
Counseling services and
support 25,467 25,231 96,996 110,256
Marketing and communication 21,603 19,451 91,620 96,001
General and administrative 10,947 13,018 47,352 56,840
University-related expense 16,669 28,290 89,001 116,488
Restructuring and impairment
charges 1,413 13,575 4,843 21,465
Loss on transaction 54,797 54,797
Total costs and expenses 150,487 117,509 459,021 474,392
Operating loss (57,344) (21,224) (61,900) (56,597)
Other income (loss), net (58) (25) (120) 1,015
Loss before income taxes (57,402) (21,249) (62,020) (55,582)
Income tax expense (benefit) (162) 1,766 (13,068) (770)
Net loss $
(57,240) $
(23,015) $
(48,952) $
(54,812)
Loss per share:
Basic $
(1.75) $
(0.76) $
(1.53) $
(1.86)
Diluted $
(1.75) $
(0.76) $
(1.53) $
(1.86)
Weighted average number of common shares
outstanding used in computing loss per share:
Basic 32,697 30,270 31,959 29,492
Diluted 32,697 30,270 31,959 29,492
ZOVIO INC
Consolidated Balance Sheets
(In thousands)
As of December 31,
2020 2019
---
ASSETS
Current assets:
Cash and cash equivalents $
35,462 $
69,280
Restricted cash 20,035 23,257
Investments 1,515 2,502
Accounts receivable, net 7,204 34,951
Prepaid expenses and other
current assets 12,617 20,524
Total current assets 76,833 150,514
Property and equipment, net 30,575 34,294
Operating lease assets 20,114 18,615
Goodwill and intangibles, net 31,785 44,419
Other long-term assets 1,999 2,296
Total assets $
161,306 $
250,138
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $
62,693 $
68,160
Deferred revenue and student
deposits 8,090 55,284
Total current liabilities 70,783 123,444
Rent liability 24,125 22,409
Other long-term liabilities 7,181 5,347
Total liabilities 102,089 151,200
Total stockholders' equity 59,217 98,938
Total liabilities and
stockholders' equity $
161,306 $
250,138
ZOVIO INC
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
2020 2019
---
Cash flows from operating activities
Net loss $
(48,952) $
(54,812)
Adjustments to reconcile net loss to net cash
used in operating activities:
Provision for bad debts 14,256 16,252
Depreciation and
amortization 11,403 10,229
Deferred income taxes 119 (36)
Stock-based compensation 8,291 12,340
Noncash lease expense 10,644 19,261
Net loss (gain) on
marketable securities (111) (308)
Reassessment of lease
charges - 558
Loss on disposal or
impairment 38 878
Loss on transaction 51,952
Changes in operating assets and liabilities:
Accounts receivable (17,666) (18,537)
Prepaid expenses and other
current assets 10,339 3,874
Other long-term assets (1,241) (7)
Accounts payable and accrued
liabilities (4,978) 1,939
Deferred revenue and student
deposits 1,706 (11,099)
Operating lease liabilities (10,751) (22,967)
Other liabilities 277 (3,651)
Net cash provided by (used
in) operating activities 25,326 (46,086)
Cash flows from investing activities
Capital expenditures (3,153) (31,029)
Purchases of investments (720) (126)
Cash transferred in
connection with disposition (62,325)
Capitalized costs for
intangible assets (272) (750)
Cash paid for acquisitions,
net of cash acquired - (19,489)
Sales of investments 1,818
Net cash used in investing
activities (64,652) (51,394)
Cash flows from financing activities
Proceeds from exercise of
stock options 8 60
Proceeds from the issuance
of stock under employee
stock purchase plan 209 192
Borrowings from notes
payable 2,682
Tax withholding on issuance
of stock awards (507) (819)
Repurchase of common stock (106)
Net cash provided by (used
in) financing activities 2,286 (567)
Net decrease in cash, cash
equivalents and restricted
cash (37,040) (98,047)
Cash, cash equivalents and
restricted cash at
beginning of period 92,537 190,584
Cash, cash equivalents and
restricted cash at end of
period $
55,497 $
92,537
ZOVIO INC
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020 2019 2020 2019
---
Operating Income (Loss) Reconciliation:
GAAP operating loss $
(57,344) $
(21,224) $
(61,900) $
(56,597)
Restructuring and
impairment charges 1,413 13,575 4,843 21,465
Separation transaction
costs 1,157 874 6,731 5,832
Acquisition costs 874 2,404 4,298 14,111
Other non-GAAP costs - 238
Loss on transaction 54,797 54,797
Non-GAAP operating
income (loss) $
897 $
(4,371) $
8,769 $
(14,951)
Net Income (Loss) Reconciliation:
GAAP net loss $
(57,240) $
(23,015) $
(48,952) $
(54,812)
Restructuring and
impairment charges 1,413 13,575 4,843 21,465
Separation transaction
costs 1,157 874 6,731 5,832
Acquisition costs 874 2,404 4,298 14,111
Other non-GAAP costs - 238
Loss on transaction 54,797 54,797
Income tax impact, non-
GAAP (89) 1,663 (13,122) (750)
Non-GAAP net income
(loss) $
912 $
(4,499) $
8,595 $
(13,916)
Diluted Income (Loss) Per Share
Reconciliation:
GAAP diluted loss per
share $
(1.75) $
(0.76) $
(1.53) $
(1.86)
Restructuring and
impairment charges 0.04 0.45 0.15 0.73
Separation transaction
costs 0.04 0.03 0.21 0.20
Acquisition costs 0.03 0.08 0.13 0.48
Other non-GAAP costs - 0.01
Loss on transaction 1.68 1.72
Income tax impact, non-
GAAP (0.01) 0.05 (0.41) (0.03)
Non-GAAP diluted income
(loss) per share $
0.03 $
(0.15) $
0.27 $
(0.47)
ZOVIO INC
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
---
2020 2019 2020 2019
---
EBITDA and Adjusted EBITDA Reconciliation:
GAAP net loss $
(57,240) $
(23,015) $
(48,952) $
(54,812)
Interest expense
(income), net 58 (91) 120 (910)
Income tax expense
(benefit) (162) 1,766 (13,068) (770)
Depreciation and
amortization 2,655 3,055 11,403 10,229
EBITDA (54,689) (18,285) (50,497) (46,263)
Restructuring and
impairment charges 1,413 13,575 4,843 21,465
Separation transaction
costs 1,157 874 6,731 5,832
Acquisition costs 42 1,570 971 11,613
Other non-GAAP costs - 238
Loss on transaction 54,797 54,797
Adjusted EBITDA $
2,720 $
(2,266) $
16,845 $
(7,115)
Contact: Alanna Vitucci
alanna.vitucci@zovio.com
858 668 2586 x11636
View original content to download multimedia:http://www.prnewswire.com/news-releases/zovio-inc-reports-fourth-quarter-and-full-year-2020-results-301234896.html
SOURCE Zovio
