CHANDLER, Ariz., April 15,
2022 /PRNewswire/ -- Zovio Inc (NASDAQ:ZVO), an
education technology services company, today announced the results
for its fourth quarter and full year ended December 31,
2021.
Financial Results for the Three Months Ended
December 31, 2021
Revenue and other revenue for the three months ended
December 31, 2021 was $54.8
million, compared with revenue of $93.1 million for the three months ended
December 31, 2020.
Operating loss for the three months ended December 31, 2021
was $23.7 million, compared with
operating loss of $57.3 million for
the three months ended December 31, 2020.
The Company recognized an income tax benefit of approximately
$47 thousand for the three months
ended December 31, 2021, compared with income tax benefit of
$0.2 million for the three months
ended December 31, 2020.
Net loss for the three months ended December 31, 2021 was
$23.6 million, compared with net loss
of $57.2 million for the three months
ended December 31, 2020.
Diluted loss per share for the three months ended
December 31, 2021 was $0.71,
compared with diluted loss per share of $1.75 for the three months ended
December 31, 2020.
Non-GAAP Financial Results for the Three Months Ended
December 31, 2021
Non-GAAP operating loss for the three months ended
December 31, 2021 was $7.8
million, compared with non-GAAP operating income of
$0.9 million for the three months
ended December 31, 2020. Non-GAAP operating loss for the three
months ended December 31, 2021 excludes legal expense of
$14.3 million, acquisition costs of
$0.5 million, stock compensation of
$0.2 million and other non-GAAP costs
of $0.9 million. 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 net loss for the three months ended December 31,
2021 was $7.7 million, compared with
non-GAAP net income of $0.9 million
for the three months ended December 31, 2020. Non-GAAP net
loss for the three months ended December 31, 2021 excludes
legal expense of $14.3 million,
acquisition costs of $0.5 million,
stock compensation of $0.2 million,
other non-GAAP costs of $0.9 million
and the related tax effects. 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, acquisition costs of
$0.9 million, loss on transaction of
$54.8 million and the related tax
effects.
Non-GAAP diluted loss per share for the three months ended
December 31, 2021 was $0.23,
compared with non-GAAP diluted income per share of $0.03 for the three months ended
December 31, 2020.
Financial Results for the Year Ended December 31,
2021
Revenue and other revenue for the year ended December 31,
2021 was $263.0 million, compared
with revenue of $397.1 million for
the year ended December 31, 2020.
Operating loss for the year ended December 31, 2021 was
$42.6 million, compared with
operating loss of $61.9 million for
the year ended December 31, 2020.
The Company recognized an income tax benefit of $0.1 million for the year ended December 31,
2021, compared with income tax benefit of $13.1 million for the year ended
December 31, 2020.
Net loss for the year ended December 31, 2021 was
$42.3 million, compared with net loss
of $49.0 million for the year ended
December 31, 2020.
Diluted loss per share for the year ended December 31, 2021
was $1.27, compared with diluted loss
per share of $1.53 for the year ended
December 31, 2020.
Non-GAAP Financial Results for the Year Ended
December 31, 2021
Non-GAAP operating loss for the year ended December 31,
2021 was $15.7 million, compared with
non-GAAP operating income of $8.8
million for the year ended December 31, 2020. Non-GAAP
operating loss for the year ended December 31, 2021 excludes
legal expense of $14.3 million,
restructuring and impairment charges of $2.6
million, separation transaction costs of $1.1 million, acquisition costs of $2.4 million, stock compensation of $1.6 million, other non-GAAP costs of
$1.4 million and severance costs of
$3.5 million. 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 net loss for the year ended December 31, 2021 was
$15.8 million, compared with non-GAAP
net income of $8.6 million for the
year ended December 31, 2020. Non-GAAP net loss for the year
ended December 31, 2021 excludes legal expense of $14.3 million, restructuring and impairment
charges of $2.6 million, separation
transaction costs of $1.1 million,
acquisition costs of $2.4 million,
stock compensation of $1.6 million
other non-GAAP costs of $1.4 million,
severance costs of $3.5 million and
the related tax effects. Non-GAAP net income for the year ended
December 31, 2020 excludes restructuring and impairment
charges of 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 diluted loss per share for the year ended
December 31, 2021 was $0.47,
compared with non-GAAP diluted income per share of $0.27 for the year ended December 31, 2020.
Balance Sheet and Cash Flow
As of December 31, 2021, the Company had cash and cash
equivalents of $28.3 million as
compared to $35.5 million as of
December 31, 2020.
The Company used $15.4 million of
cash in operating activities during the year ended
December 31, 2021, compared with $25.3
million of cash provided by operating activities during the
year ended December 31, 2020.
On April 14, 2022, the Company
entered into a credit facility as the borrower, with each of its
wholly-owned subsidiaries as guarantors. The credit facility
provides for, among other things, a term loan in the aggregate
principal amount of $31.5 million.
Subject to the terms of credit facility, the term loan bears
interest at a rate per annum equal to LIBOR plus 9%.
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 expense,
restructuring and impairment charges, separation transaction costs,
acquisition costs, non-GAAP stock compensation, loss on
transaction, 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 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 (888) 330-3204, and the dial-in number for other callers is
(646) 960-0844. The access code for all callers is 8039474. 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
2022 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 reliability of
certain financial and accounting measures we utilize.
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, 2021 to be filed with the SEC on April 15,
2022, 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
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
University Partners
segment revenue
|
$
45,675
|
|
$
87,401
|
|
$
232,793
|
|
$
376,220
|
|
Zovio Growth segment
revenue
|
9,087
|
|
5,742
|
|
30,240
|
|
20,901
|
|
Revenue and other
revenue
|
54,762
|
|
93,143
|
|
263,033
|
|
397,121
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Technology and academic services
|
16,965
|
|
19,591
|
|
70,663
|
|
74,412
|
|
Counseling services and support
|
20,578
|
|
25,467
|
|
89,514
|
|
96,996
|
|
Marketing and communication
|
16,700
|
|
21,603
|
|
85,328
|
|
91,620
|
|
General and administrative
|
9,875
|
|
10,947
|
|
43,160
|
|
47,352
|
|
University-related expense
|
—
|
|
16,669
|
|
—
|
|
89,001
|
|
Legal expense
|
14,335
|
|
—
|
|
14,335
|
|
—
|
|
Restructuring and impairment charges
|
—
|
|
1,413
|
|
2,641
|
|
4,843
|
|
Loss on transaction
|
—
|
|
54,797
|
|
—
|
|
54,797
|
|
Total costs and
expenses
|
78,453
|
|
150,487
|
|
305,641
|
|
459,021
|
|
Operating
loss
|
(23,691)
|
|
(57,344)
|
|
(42,608)
|
|
(61,900)
|
|
Other income (loss),
net
|
40
|
|
(58)
|
|
130
|
|
(120)
|
|
Loss before income
taxes
|
(23,651)
|
|
(57,402)
|
|
(42,478)
|
|
(62,020)
|
|
Income tax expense
(benefit)
|
(47)
|
|
(162)
|
|
(129)
|
|
(13,068)
|
|
Net loss
|
$
(23,604)
|
|
$
(57,240)
|
|
$
(42,349)
|
|
$
(48,952)
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.71)
|
|
$
(1.75)
|
|
$
(1.27)
|
|
$
(1.53)
|
|
Diluted
|
$
(0.71)
|
|
$
(1.75)
|
|
$
(1.27)
|
|
$
(1.53)
|
|
Weighted average number
of common shares outstanding used in computing loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
33,475
|
|
32,697
|
|
33,256
|
|
31,959
|
|
Diluted
|
33,475
|
|
32,697
|
|
33,256
|
|
31,959
|
|
ZOVIO INC
Consolidated Balance
Sheets
(In
thousands)
|
|
|
As of December 31,
|
|
2021
|
|
2020
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
$
28,265
|
|
$
35,462
|
|
Restricted cash
|
9,288
|
|
20,035
|
|
Investments
|
974
|
|
1,515
|
|
Accounts receivable, net
|
9,631
|
|
7,204
|
|
Prepaid expenses and other current assets
|
13,423
|
|
12,617
|
|
Total current
assets
|
61,581
|
|
76,833
|
|
Property and equipment,
net
|
26,382
|
|
30,575
|
|
Operating lease
assets
|
28,881
|
|
20,114
|
|
Goodwill and
intangibles, net
|
29,499
|
|
31,785
|
|
Other long-term
assets
|
2,691
|
|
1,999
|
|
Total assets
|
$
149,034
|
|
$
161,306
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
74,769
|
|
$
62,693
|
|
Deferred revenue and student deposits
|
14,939
|
|
8,090
|
|
Total current
liabilities
|
89,708
|
|
70,783
|
|
Rent
liability
|
34,205
|
|
24,125
|
|
Other long-term
liabilities
|
5,115
|
|
7,181
|
|
Total
liabilities
|
129,028
|
|
102,089
|
|
Total stockholders'
equity
|
20,006
|
|
59,217
|
|
Total liabilities and
stockholders' equity
|
$
149,034
|
|
$
161,306
|
|
ZOVIO INC
Consolidated
Statements of Cash Flows
(In
thousands)
|
|
|
Year Ended December 31,
|
|
2021
|
|
2020
|
|
Cash flows from operating
activities
|
|
|
|
|
Net loss
|
$
(42,349)
|
|
$
(48,952)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Provision for bad debts
|
1,229
|
|
14,256
|
|
Depreciation and amortization
|
8,333
|
|
11,403
|
|
Deferred income taxes
|
—
|
|
119
|
|
Stock-based compensation
|
4,367
|
|
8,291
|
|
Noncash lease expense
|
8,240
|
|
10,644
|
|
Net
loss (gain) on marketable securities
|
(212)
|
|
(111)
|
|
Loss on disposal or impairment
|
239
|
|
38
|
|
Loss on transaction
|
—
|
|
51,952
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
(3,656)
|
|
(17,666)
|
|
Prepaid expenses and other current
assets
|
(806)
|
|
10,339
|
|
Other long-term assets
|
(692)
|
|
(1,241)
|
|
Accounts payable and accrued
liabilities
|
14,495
|
|
(4,978)
|
|
Deferred revenue and student
deposits
|
6,849
|
|
1,706
|
|
Operating lease
liabilities
|
(9,281)
|
|
(10,751)
|
|
Other liabilities
|
(2,189)
|
|
277
|
|
Net cash provided by (used in) operating
activities
|
(15,433)
|
|
25,326
|
|
Cash flows from investing
activities
|
|
|
|
|
Capital
expenditures
|
(1,436)
|
|
(3,153)
|
|
Purchases of
investments
|
(1,080)
|
|
(720)
|
|
Cash transferred in
connection with disposition
|
—
|
|
(62,325)
|
|
Capitalized costs for
intangible assets
|
(721)
|
|
(272)
|
|
Sales of
investments
|
1,833
|
|
1,818
|
|
Net cash used in investing
activities
|
(1,404)
|
|
(64,652)
|
|
Cash flows from financing
activities
|
|
|
|
|
Proceeds from exercise
of stock options
|
—
|
|
8
|
|
Proceeds from the
issuance of stock under employee stock purchase plan
|
125
|
|
209
|
|
Borrowings from notes
payable
|
—
|
|
2,682
|
|
Tax withholding on
issuance of stock awards
|
(1,232)
|
|
(507)
|
|
Repurchase of common
stock
|
—
|
|
(106)
|
|
Net cash provided by (used in) financing
activities
|
(1,107)
|
|
2,286
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(17,944)
|
|
(37,040)
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
55,497
|
|
92,537
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
37,553
|
|
$
55,497
|
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Operating Income (Loss)
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
(23,691)
|
|
$
(57,344)
|
|
$
(42,608)
|
|
$
(61,900)
|
|
Legal expense
|
14,335
|
|
—
|
|
14,335
|
|
—
|
|
Restructuring and impairment expense
|
—
|
|
1,413
|
|
2,641
|
|
4,843
|
|
Separation transaction costs
|
—
|
|
1,157
|
|
1,114
|
|
6,731
|
|
Acquisition costs
|
513
|
|
874
|
|
2,371
|
|
4,298
|
|
Non-GAAP stock compensation
|
199
|
|
—
|
|
1,563
|
|
—
|
|
Other non-GAAP costs
|
893
|
|
—
|
|
1,390
|
|
—
|
|
Loss on transaction
|
—
|
|
54,797
|
|
—
|
|
54,797
|
|
Severance costs
|
—
|
|
—
|
|
3,481
|
|
—
|
|
Non-GAAP operating
income (loss)
|
$
(7,751)
|
|
$
897
|
|
$
(15,713)
|
|
$
8,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
(23,604)
|
|
$
(57,240)
|
|
$
(42,349)
|
|
$
(48,952)
|
|
Legal expense
|
14,335
|
|
—
|
|
14,335
|
|
—
|
|
Restructuring and impairment expense
|
—
|
|
1,413
|
|
2,641
|
|
4,843
|
|
Separation transaction costs
|
—
|
|
1,157
|
|
1,114
|
|
6,731
|
|
Acquisition costs
|
513
|
|
874
|
|
2,371
|
|
4,298
|
|
Non-GAAP stock compensation
|
199
|
|
—
|
|
1,563
|
|
—
|
|
Other non-GAAP costs
|
893
|
|
—
|
|
1,390
|
|
—
|
|
Loss on transaction
|
—
|
|
54,797
|
|
—
|
|
54,797
|
|
Severance costs
|
—
|
|
—
|
|
3,481
|
|
—
|
|
Income tax impacts, non-GAAP
|
(32)
|
|
(89)
|
|
(307)
|
|
(13,122)
|
|
Non-GAAP net income
(loss)
|
$
(7,696)
|
|
$
912
|
|
$
(15,761)
|
|
$
8,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Income (Loss) Per Share
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per share
|
$
(0.71)
|
|
$
(1.75)
|
|
$
(1.27)
|
|
$
(1.53)
|
|
Legal expense
|
0.43
|
|
—
|
|
0.43
|
|
—
|
|
Restructuring and impairment expense
|
—
|
|
0.04
|
|
0.08
|
|
0.15
|
|
Separation transaction costs
|
—
|
|
0.04
|
|
0.03
|
|
0.21
|
|
Acquisition costs
|
0.01
|
|
0.03
|
|
0.07
|
|
0.13
|
|
Non-GAAP stock compensation
|
0.01
|
|
—
|
|
0.05
|
|
—
|
|
Other non-GAAP costs
|
0.03
|
|
—
|
|
0.05
|
|
0.01
|
|
Loss on transaction
|
—
|
|
1.68
|
|
—
|
|
1.71
|
|
Severance costs
|
—
|
|
—
|
|
0.10
|
|
—
|
|
Income tax impacts, non-GAAP
|
0.00
|
|
(0.01)
|
|
(0.01)
|
|
(0.41)
|
|
Non-GAAP diluted income
(loss) per share
|
$
(0.23)
|
|
$
0.03
|
|
$
(0.47)
|
|
$
0.27
|
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
EBITDA and AdjustedEBITDA
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
(23,604)
|
|
$
(57,240)
|
|
$
(42,349)
|
|
$
(48,952)
|
|
Other expense (income), net
|
(40)
|
|
58
|
|
(130)
|
|
120
|
|
Income tax expense (benefit)
|
(47)
|
|
(162)
|
|
(129)
|
|
(13,068)
|
|
Depreciation and amortization
|
2,035
|
|
2,655
|
|
8,333
|
|
11,403
|
|
EBITDA
|
(21,656)
|
|
(54,689)
|
|
(34,275)
|
|
(50,497)
|
|
Legal expense
|
14,335
|
|
—
|
|
14,335
|
|
—
|
|
Restructuring and impairment charges
|
—
|
|
1,413
|
|
2,641
|
|
4,843
|
|
Separation transaction costs
|
—
|
|
1,157
|
|
1,114
|
|
6,731
|
|
Acquisition costs
|
—
|
|
42
|
|
—
|
|
971
|
|
Non-GAAP stock compensation
|
199
|
|
—
|
|
1,563
|
|
—
|
|
Other non-GAAP costs
|
893
|
|
—
|
|
1,390
|
|
—
|
|
Loss on transaction
|
—
|
|
54,797
|
|
—
|
|
54,797
|
|
Severance costs
|
—
|
|
—
|
|
3,481
|
|
—
|
|
Adjusted
EBITDA
|
$
(6,229)
|
|
$
2,720
|
|
$
(9,751)
|
|
$
16,845
|
Contact: Vickie Schray
vickie.schray@zovio.com
866 475 0317 x10003
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SOURCE Zovio
