(Mark One)
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
59-3551629
(I.R.S. Employer
Identification No.)
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
(Do not check if a
smaller reporting company)
|
Smaller reporting company ☐
|
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As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
258,354
|
|
|
$
|
282,145
|
|
Restricted cash
|
26,223
|
|
|
24,685
|
|
||
Investments
|
27,802
|
|
|
19,387
|
|
||
Accounts receivable, net
|
30,614
|
|
|
24,091
|
|
||
Student loans receivable, net
|
—
|
|
|
775
|
|
||
Prepaid expenses and other current assets
|
39,181
|
|
|
52,192
|
|
||
Total current assets
|
382,174
|
|
|
403,275
|
|
||
Property and equipment, net
|
16,021
|
|
|
21,742
|
|
||
Investments
|
44,984
|
|
|
47,770
|
|
||
Student loans receivable, net
|
—
|
|
|
7,394
|
|
||
Goodwill and intangibles, net
|
18,301
|
|
|
21,265
|
|
||
Other long-term assets
|
2,713
|
|
|
5,320
|
|
||
Total assets
|
$
|
464,193
|
|
|
$
|
506,766
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
69,185
|
|
|
$
|
79,196
|
|
Deferred revenue and student deposits
|
75,696
|
|
|
88,756
|
|
||
Total current liabilities
|
144,881
|
|
|
167,952
|
|
||
Rent liability
|
14,098
|
|
|
20,118
|
|
||
Other long-term liabilities
|
13,575
|
|
|
15,046
|
|
||
Total liabilities
|
172,554
|
|
|
203,116
|
|
||
Commitments and contingencies (see Note 14)
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value:
|
|
|
|
||||
20,000 shares authorized; zero shares issued and outstanding at both September 30, 2016, and December 31, 2015
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value:
|
|
|
|
||||
300,000 shares authorized; 63,883 issued and 46,326 outstanding at September 30, 2016; 63,407 issued and 45,850 outstanding at December 31, 2015
|
639
|
|
|
634
|
|
||
Additional paid-in capital
|
192,950
|
|
|
188,863
|
|
||
Retained earnings
|
435,070
|
|
|
451,321
|
|
||
Accumulated other comprehensive income (loss)
|
49
|
|
|
(99
|
)
|
||
Treasury stock, 17,557 shares at cost at both September 30, 2016, and December 31, 2015
|
(337,069
|
)
|
|
(337,069
|
)
|
||
Total stockholders' equity
|
291,639
|
|
|
303,650
|
|
||
Total liabilities and stockholders' equity
|
$
|
464,193
|
|
|
$
|
506,766
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
136,583
|
|
|
$
|
140,762
|
|
|
$
|
407,555
|
|
|
$
|
430,337
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Instructional costs and services
|
64,095
|
|
|
69,197
|
|
|
200,129
|
|
|
215,656
|
|
||||
Admissions advisory and marketing
|
52,590
|
|
|
47,794
|
|
|
156,798
|
|
|
148,636
|
|
||||
General and administrative
|
11,604
|
|
|
13,346
|
|
|
36,709
|
|
|
42,914
|
|
||||
Legal settlement expense
|
16,752
|
|
|
—
|
|
|
32,918
|
|
|
—
|
|
||||
Restructuring and impairment charges
|
365
|
|
|
44,904
|
|
|
2,766
|
|
|
59,322
|
|
||||
Total costs and expenses
|
145,406
|
|
|
175,241
|
|
|
429,320
|
|
|
466,528
|
|
||||
Operating loss
|
(8,823
|
)
|
|
(34,479
|
)
|
|
(21,765
|
)
|
|
(36,191
|
)
|
||||
Other income, net
|
557
|
|
|
465
|
|
|
1,892
|
|
|
1,499
|
|
||||
Loss before income taxes
|
(8,266
|
)
|
|
(34,014
|
)
|
|
(19,873
|
)
|
|
(34,692
|
)
|
||||
Income tax expense (benefit)
|
1,211
|
|
|
28,732
|
|
|
(3,622
|
)
|
|
29,075
|
|
||||
Net loss
|
$
|
(9,477
|
)
|
|
$
|
(62,746
|
)
|
|
$
|
(16,251
|
)
|
|
$
|
(63,767
|
)
|
Loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.40
|
)
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.40
|
)
|
Weighted average number of common shares outstanding used in computing loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
46,315
|
|
|
45,754
|
|
|
46,180
|
|
|
45,620
|
|
||||
Diluted
|
46,315
|
|
|
45,754
|
|
|
46,180
|
|
|
45,620
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
$
|
(9,477
|
)
|
|
$
|
(62,746
|
)
|
|
$
|
(16,251
|
)
|
|
$
|
(63,767
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized (losses) gains on investments
|
(46
|
)
|
|
(12
|
)
|
|
148
|
|
|
123
|
|
||||
Comprehensive loss
|
$
|
(9,523
|
)
|
|
$
|
(62,758
|
)
|
|
$
|
(16,103
|
)
|
|
$
|
(63,644
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
Treasury
Stock
|
|
|
|||||||||||||||
|
Shares
|
|
Par Value
|
|
Total
|
|||||||||||||||||||||
Balance at December 31, 2014
|
62,957
|
|
|
$
|
630
|
|
|
$
|
180,720
|
|
|
$
|
521,775
|
|
|
$
|
(175
|
)
|
|
$
|
(337,069
|
)
|
|
$
|
365,881
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,324
|
|
||||||
Exercise of stock options
|
166
|
|
|
1
|
|
|
259
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
260
|
|
||||||
Excess tax benefit of option exercises and restricted stock, net of tax shortfall
|
—
|
|
|
—
|
|
|
(770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(770
|
)
|
||||||
Stock issued under employee stock purchase plan
|
16
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136
|
|
||||||
Stock issued under stock incentive plan, net of shares held for taxes
|
201
|
|
|
2
|
|
|
(1,294
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,292
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,767
|
)
|
|
—
|
|
|
—
|
|
|
(63,767
|
)
|
||||||
Unrealized gains on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
||||||
Balance at September 30, 2015
|
63,340
|
|
|
$
|
633
|
|
|
$
|
186,375
|
|
|
$
|
458,008
|
|
|
$
|
(52
|
)
|
|
$
|
(337,069
|
)
|
|
$
|
307,895
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
Treasury
Stock
|
|
|
|||||||||||||||
|
Shares
|
|
Par Value
|
|
Total
|
|||||||||||||||||||||
Balance at December 31, 2015
|
63,407
|
|
|
$
|
634
|
|
|
$
|
188,863
|
|
|
$
|
451,321
|
|
|
$
|
(99
|
)
|
|
$
|
(337,069
|
)
|
|
$
|
303,650
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,679
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,679
|
|
||||||
Exercise of stock options
|
185
|
|
|
2
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
||||||
Stock issued under employee stock purchase plan
|
16
|
|
|
1
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
||||||
Stock issued under stock incentive plan, net of shares held for taxes
|
275
|
|
|
2
|
|
|
(1,843
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,841
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,251
|
)
|
|
—
|
|
|
—
|
|
|
(16,251
|
)
|
||||||
Unrealized gains on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||||
Balance at September 30, 2016
|
63,883
|
|
|
$
|
639
|
|
|
$
|
192,950
|
|
|
$
|
435,070
|
|
|
$
|
49
|
|
|
$
|
(337,069
|
)
|
|
$
|
291,639
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(16,251
|
)
|
|
$
|
(63,767
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
||||
Provision for bad debts
|
23,565
|
|
|
24,269
|
|
||
Depreciation and amortization
|
10,068
|
|
|
15,403
|
|
||
Amortization of premium/discount
|
38
|
|
|
364
|
|
||
Deferred income taxes
|
—
|
|
|
24,081
|
|
||
Stock-based compensation
|
5,679
|
|
|
7,324
|
|
||
Excess tax benefit of option exercises
|
—
|
|
|
(426
|
)
|
||
Write-off or impairment of student loans receivable
|
7,542
|
|
|
1,207
|
|
||
Net (gain) loss on marketable securities
|
(103
|
)
|
|
125
|
|
||
Loss on termination of leased space
|
—
|
|
|
13,540
|
|
||
Loss on disposal or impairment of fixed assets
|
809
|
|
|
38,855
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Restricted cash
|
4,066
|
|
|
7,712
|
|
||
Accounts receivable
|
(29,929
|
)
|
|
(33,524
|
)
|
||
Prepaid expenses and other current assets
|
(2,802
|
)
|
|
5,537
|
|
||
Student loans receivable
|
876
|
|
|
831
|
|
||
Other long-term assets
|
2,607
|
|
|
266
|
|
||
Accounts payable and accrued liabilities
|
5,508
|
|
|
(2,883
|
)
|
||
Deferred revenue and student deposits
|
(13,049
|
)
|
|
(18,313
|
)
|
||
Other liabilities
|
(7,490
|
)
|
|
(3,960
|
)
|
||
Net cash (used in) provided by operating activities
|
(8,866
|
)
|
|
16,641
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(1,562
|
)
|
|
(2,324
|
)
|
||
Purchases of investments
|
(20,237
|
)
|
|
(20,242
|
)
|
||
Non-operating restricted cash
|
(5,604
|
)
|
|
(6,369
|
)
|
||
Capitalized costs for intangible assets
|
(649
|
)
|
|
(1,761
|
)
|
||
Sales of investments
|
—
|
|
|
10,101
|
|
||
Maturities of investments
|
14,714
|
|
|
40,094
|
|
||
Net cash (used in) provided by investing activities
|
(13,338
|
)
|
|
19,499
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
142
|
|
|
260
|
|
||
Excess tax benefit of option exercises
|
—
|
|
|
426
|
|
||
Proceeds from the issuance of stock under employee stock purchase plan
|
112
|
|
|
136
|
|
||
Tax withholdings on issuance of stock awards
|
(1,841
|
)
|
|
(1,292
|
)
|
||
Net cash used in financing activities
|
(1,587
|
)
|
|
(470
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(23,791
|
)
|
|
35,670
|
|
||
Cash and cash equivalents at beginning of period
|
282,145
|
|
|
207,003
|
|
||
Cash and cash equivalents at end of period
|
$
|
258,354
|
|
|
$
|
242,673
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Purchase of equipment included in accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
70
|
|
Issuance of common stock for vested restricted stock units
|
$
|
4,696
|
|
|
$
|
3,154
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Asset impairment
|
$
|
—
|
|
|
$
|
37,300
|
|
|
$
|
—
|
|
|
$
|
38,612
|
|
Student transfer agreement costs
|
(114
|
)
|
|
4,275
|
|
|
(147
|
)
|
|
4,275
|
|
||||
Severance costs
|
—
|
|
|
2,120
|
|
|
2,246
|
|
|
2,895
|
|
||||
Lease exit and other costs
|
479
|
|
|
1,209
|
|
|
667
|
|
|
13,540
|
|
||||
Total restructuring and impairment charges
|
$
|
365
|
|
|
$
|
44,904
|
|
|
$
|
2,766
|
|
|
$
|
59,322
|
|
|
Student Transfer Agreement Costs
|
|
Severance Costs
|
|
Lease Exit and Other Costs
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
3,224
|
|
|
$
|
1,744
|
|
|
$
|
13,921
|
|
|
$
|
18,889
|
|
Restructuring and impairment charges
|
(147
|
)
|
|
2,246
|
|
|
667
|
|
|
2,766
|
|
||||
Payments
|
(1,490
|
)
|
|
(3,101
|
)
|
|
(6,930
|
)
|
|
(11,521
|
)
|
||||
Balance at September 30, 2016
|
$
|
1,587
|
|
|
$
|
889
|
|
|
$
|
7,658
|
|
|
$
|
10,134
|
|
|
As of September 30, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Mutual funds
|
$
|
1,653
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,653
|
|
Corporate notes and bonds
|
—
|
|
|
26,149
|
|
|
—
|
|
|
26,149
|
|
||||
U.S. government and agency securities
|
—
|
|
|
19,984
|
|
|
—
|
|
|
19,984
|
|
||||
Certificates of deposit
|
—
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
||||
Total
|
$
|
1,653
|
|
|
$
|
71,133
|
|
|
$
|
—
|
|
|
$
|
72,786
|
|
|
As of December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Mutual funds
|
$
|
1,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,314
|
|
Corporate notes and bonds
|
—
|
|
|
40,843
|
|
|
—
|
|
|
40,843
|
|
||||
Certificates of deposit
|
—
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
||||
Total
|
$
|
1,314
|
|
|
$
|
65,843
|
|
|
$
|
—
|
|
|
$
|
67,157
|
|
|
September 30, 2016
|
||||||||||||||||
|
|
|
|
|
Gross unrealized
|
|
|
||||||||||
|
Maturities
|
|
Amortized Cost
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Short-term
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate notes and bonds
|
1 year or less
|
|
26,144
|
|
|
6
|
|
|
(1
|
)
|
|
26,149
|
|
||||
Long-term
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency securities
|
3 years or less
|
|
20,000
|
|
|
—
|
|
|
(16
|
)
|
|
19,984
|
|
||||
Certificates of deposit
|
3 years or less
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
||||
Total
|
|
|
$
|
71,144
|
|
|
$
|
6
|
|
|
$
|
(17
|
)
|
|
$
|
71,133
|
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Accounts receivable
|
$
|
44,739
|
|
|
$
|
34,205
|
|
Less allowance for doubtful accounts
|
(14,125
|
)
|
|
(10,114
|
)
|
||
Accounts receivable, net
|
$
|
30,614
|
|
|
$
|
24,091
|
|
|
Beginning
Balance
|
|
Charged to
Expense
|
|
Deductions(1)
|
|
Ending
Balance
|
||||||||
Allowance for doubtful accounts receivable:
|
|
|
|
|
|
|
|
||||||||
For the nine months ended September 30, 2016
|
$
|
(10,114
|
)
|
|
$
|
23,406
|
|
|
$
|
(19,395
|
)
|
|
$
|
(14,125
|
)
|
For the nine months ended September 30, 2015
|
$
|
(27,567
|
)
|
|
$
|
24,249
|
|
|
$
|
(25,281
|
)
|
|
$
|
(26,535
|
)
|
(1)
|
Deductions represent accounts written off, net of recoveries.
|
Short-term:
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Student loans receivable (non-tuition related)
|
$
|
—
|
|
|
$
|
310
|
|
Student loans receivable (tuition related)
|
—
|
|
|
555
|
|
||
Current student loans receivable
|
—
|
|
|
865
|
|
||
Less allowance for doubtful accounts
|
—
|
|
|
(90
|
)
|
||
Student loans receivable, net
|
$
|
—
|
|
|
$
|
775
|
|
Long-term:
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Student loans receivable (non-tuition related)
|
$
|
—
|
|
|
$
|
3,314
|
|
Student loans receivable (tuition related)
|
—
|
|
|
4,943
|
|
||
Non-current student loans receivable
|
—
|
|
|
8,257
|
|
||
Less allowance for doubtful accounts
|
—
|
|
|
(863
|
)
|
||
Student loans receivable, net
|
$
|
—
|
|
|
$
|
7,394
|
|
|
Beginning
Balance
|
|
Charged to
Expense
|
|
Deductions(1)
|
|
Ending
Balance
|
||||||||
Allowance for doubtful student loans receivable (tuition related):
|
|
|
|
|
|
|
|
||||||||
For the nine months ended September 30, 2016
|
$
|
(953
|
)
|
|
$
|
159
|
|
|
$
|
(1,112
|
)
|
|
$
|
—
|
|
For the nine months ended September 30, 2015
|
$
|
(1,495
|
)
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
(1,515
|
)
|
(1)
|
Deductions represent accounts written off, net of recoveries.
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Prepaid expenses
|
$
|
6,312
|
|
|
$
|
7,005
|
|
Prepaid licenses
|
5,109
|
|
|
5,221
|
|
||
Income tax receivable
|
23,999
|
|
|
20,169
|
|
||
Prepaid insurance
|
1,985
|
|
|
1,619
|
|
||
Interest receivable
|
215
|
|
|
299
|
|
||
Insurance recoverable
|
997
|
|
|
16,659
|
|
||
Other current assets
|
564
|
|
|
1,220
|
|
||
Total prepaid expenses and other current assets
|
$
|
39,181
|
|
|
$
|
52,192
|
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Furniture and office equipment
|
$
|
53,898
|
|
|
$
|
63,354
|
|
Software
|
12,299
|
|
|
12,605
|
|
||
Leasehold improvements
|
11,050
|
|
|
11,136
|
|
||
Vehicles
|
22
|
|
|
22
|
|
||
Total property and equipment
|
77,269
|
|
|
87,117
|
|
||
Less accumulated depreciation
|
(61,248
|
)
|
|
(65,375
|
)
|
||
Total property and equipment, net
|
$
|
16,021
|
|
|
$
|
21,742
|
|
|
September 30, 2016
|
||||||||||
Definite-lived intangible assets:
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Capitalized curriculum costs
|
$
|
20,972
|
|
|
$
|
(16,642
|
)
|
|
$
|
4,330
|
|
Purchased intangible assets
|
15,850
|
|
|
(4,446
|
)
|
|
11,404
|
|
|||
Total definite-lived intangible assets
|
$
|
36,822
|
|
|
$
|
(21,088
|
)
|
|
$
|
15,734
|
|
Goodwill and indefinite-lived intangibles
|
|
|
|
|
2,567
|
|
|||||
Total goodwill and intangibles, net
|
|
|
|
|
$
|
18,301
|
|
||||
|
|
|
|
|
|
||||||
|
December 31, 2015
|
||||||||||
Definite-lived intangible assets:
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Capitalized curriculum costs
|
$
|
20,323
|
|
|
$
|
(13,954
|
)
|
|
$
|
6,369
|
|
Purchased intangible assets
|
15,850
|
|
|
(3,521
|
)
|
|
12,329
|
|
|||
Total definite-lived intangible assets
|
$
|
36,173
|
|
|
$
|
(17,475
|
)
|
|
$
|
18,698
|
|
Goodwill and indefinite-lived intangibles
|
|
|
|
|
2,567
|
|
|||||
Total goodwill and intangibles, net
|
|
|
|
|
$
|
21,265
|
|
Year Ended December 31,
|
|
|
||
Remainder of 2016
|
$
|
1,084
|
|
|
2017
|
3,383
|
|
||
2018
|
2,320
|
|
||
2019
|
1,532
|
|
||
2020
|
1,248
|
|
||
Thereafter
|
6,167
|
|
||
Total future amortization expense
|
$
|
15,734
|
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Accounts payable
|
$
|
3,850
|
|
|
$
|
4,762
|
|
Accrued salaries and wages
|
6,010
|
|
|
10,476
|
|
||
Accrued bonus
|
4,406
|
|
|
4,295
|
|
||
Accrued vacation
|
9,567
|
|
|
9,628
|
|
||
Accrued litigation and fees
|
13,872
|
|
|
720
|
|
||
Accrued expenses
|
18,184
|
|
|
17,243
|
|
||
Rent liability
|
10,296
|
|
|
13,406
|
|
||
Accrued insurance liability
|
3,000
|
|
|
18,666
|
|
||
Total accounts payable and accrued liabilities
|
$
|
69,185
|
|
|
$
|
79,196
|
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Deferred revenue
|
$
|
28,264
|
|
|
$
|
23,311
|
|
Student deposits
|
47,432
|
|
|
65,445
|
|
||
Total deferred revenue and student deposits
|
$
|
75,696
|
|
|
$
|
88,756
|
|
|
As of
September 30, 2016 |
|
As of
December 31, 2015 |
||||
Uncertain tax positions
|
$
|
7,989
|
|
|
$
|
7,870
|
|
Legal settlements
|
—
|
|
|
178
|
|
||
Student transfer agreement costs
|
603
|
|
|
—
|
|
||
Other long-term liabilities
|
4,983
|
|
|
6,998
|
|
||
Total other long-term liabilities
|
$
|
13,575
|
|
|
$
|
15,046
|
|
Year Ended December 31,
|
|
|
||
Remainder of 2016
|
$
|
9,652
|
|
|
2017
|
35,836
|
|
||
2018
|
31,065
|
|
||
2019
|
20,488
|
|
||
2020
|
9,150
|
|
||
Thereafter
|
6,882
|
|
||
Total minimum payments
|
$
|
113,073
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(9,477
|
)
|
|
$
|
(62,746
|
)
|
|
$
|
(16,251
|
)
|
|
$
|
(63,767
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
46,315
|
|
|
45,754
|
|
|
46,180
|
|
|
45,620
|
|
||||
Effect of dilutive options and stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average number of common shares outstanding
|
46,315
|
|
|
45,754
|
|
|
46,180
|
|
|
45,620
|
|
||||
Loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.40
|
)
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
(1.37
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.40
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Stock options
|
4,258
|
|
|
5,147
|
|
|
4,468
|
|
|
5,116
|
|
RSUs and PSUs
|
588
|
|
|
691
|
|
|
991
|
|
|
673
|
|
•
|
our ability to successfully remediate the control deficiencies that gave rise to the material weaknesses in our internal control over financial reporting discussed in Part I, Item 4, “Controls and Procedures”;
|
•
|
Ashford University’s ability to continue to operate an accredited institution subject to the requirements of the State of California, Department of Consumer Affairs, Bureau for Private Postsecondary Education;
|
•
|
our ability to comply with the extensive and continually evolving regulatory framework applicable to us and our institutions, including Title IV of the Higher Education Act of 1965, as amended (the “Higher Education Act”), and its implementing regulations, the gainful employment rules and regulations, the recently issued “defense to repayment” regulations, state laws and regulatory requirements, and accrediting agency requirements;
|
•
|
projections, predictions and expectations regarding financial position, results of operations, liquidity and enrollment trends at our institutions;
|
•
|
expectations regarding the effect of the closure of Ashford University’s residential campus in Clinton, Iowa (the “Clinton Campus”);
|
•
|
our ability to obtain continued approval of Ashford’s programs for GI Bill benefits through the Iowa State Approving Agency (the “ISAA”) and to prevent any disruption of educational benefits to Ashford’s veteran students;
|
•
|
new initiatives focused on student success and academic quality;
|
•
|
changes in our student fee structure;
|
•
|
expectations regarding the adequacy of our cash and cash equivalents and other sources of liquidity for ongoing operations;
|
•
|
expectations regarding investment in online and other advertising and capital expenditures;
|
•
|
our anticipated seasonal fluctuations in results of operations;
|
•
|
management’s goals and objectives; and
|
•
|
other similar matters that are not historical facts.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consolidated Statement of Income (Loss) Data:
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
136,583
|
|
|
$
|
140,762
|
|
|
$
|
407,555
|
|
|
$
|
430,337
|
|
Operating loss
|
$
|
(8,823
|
)
|
|
$
|
(34,479
|
)
|
|
$
|
(21,765
|
)
|
|
$
|
(36,191
|
)
|
|
|
|
|
|
|
|
|
||||||||
Consolidated Other Data:
|
|
|
|
|
|
|
|
||||||||
Period-end enrollment
(1)
|
|
|
|
|
|
|
|
||||||||
Online
|
47,733
|
|
|
49,449
|
|
|
47,733
|
|
|
49,449
|
|
||||
Campus
|
98
|
|
|
533
|
|
|
98
|
|
|
533
|
|
||||
Total
|
47,831
|
|
|
49,982
|
|
|
47,831
|
|
|
49,982
|
|
(1)
|
We define period-end enrollment as the number of active students on the last day of the financial reporting period. A student is considered active if the student has attended a class within the prior 15 days or is on an institutionally-approved break not to exceed 45 days, unless the student has graduated or provided notice of withdrawal.
|
•
|
Certification: Institutions must certify that each of their gainful employment programs meet state and federal licensure, certification and accreditation requirements.
|
•
|
Accountability Measures: To maintain Title IV eligibility, gainful employment programs will be required to meet minimum standards for the debt burden versus the earnings of their graduates.
|
◦
|
Pass: Programs whose graduates have annual loan payments less than 8% of total earnings or less than 20% of discretionary earnings.
|
◦
|
Zone: Programs whose graduates have annual loan payments between 8% and 12% of total earnings or between 20% and 30% of discretionary earnings.
|
◦
|
Fail: Programs whose graduates have annual loan payments greater than 12% of total earnings and greater than 30% of discretionary earnings.
|
•
|
Transparency: Institutions will be required to make public disclosures regarding the performance and outcomes of their gainful employment programs. The disclosures will include information such as costs, earnings, debt and completion rates.
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
(In thousands)
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
Operating lease obligations
|
$
|
113,073
|
|
|
$
|
9,652
|
|
|
$
|
35,836
|
|
|
$
|
31,065
|
|
|
$
|
20,488
|
|
|
$
|
9,150
|
|
|
$
|
6,882
|
|
Other contractual obligations
|
65,785
|
|
|
2,765
|
|
|
15,180
|
|
|
12,648
|
|
|
11,642
|
|
|
9,599
|
|
|
13,951
|
|
|||||||
Uncertain tax positions
|
7,989
|
|
|
—
|
|
|
7,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
186,847
|
|
|
$
|
12,417
|
|
|
$
|
59,005
|
|
|
$
|
43,713
|
|
|
$
|
32,130
|
|
|
$
|
18,749
|
|
|
$
|
20,833
|
|
Exhibit
|
|
|
Description
|
10.1
|
|
†
|
Services Order Form, dated September 20, 2016, with Instructure, Inc.
|
10.2
|
|
|
First Amendment to License Agreement, dated July 12, 2016, between Forbes Education Holdings, LLC, Bridgepoint Education, Inc. and Ashford University, LLC.
|
31.1
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Andrew S. Clark, President and Chief Executive Officer, and Kevin Royal, Chief Financial Officer.
|
99.1
|
|
|
Disclosure required pursuant to Section 13(r) of the Securities Exchange Act of 1934.
|
101
|
|
|
The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 8, 2016, formatted in Extensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015; (ii) the Condensed Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2016 and 2015; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015; (iv) the Condensed Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2016 and 2015; (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015; and (vi) the Notes to Condensed Consolidated Financial Statements.
|
†
|
Portions of this exhibit have been omitted pursuant to a request for confidential treatment and the non-public information has been filed separately with the SEC.
|
|
BRIDGEPOINT EDUCATION, INC.
|
|
|
November 8, 2016
|
/s/ KEVIN ROYAL
|
|
Kevin Royal
Chief Financial Officer
(Principal financial officer and duly authorized to
sign on behalf of the registrant)
|
Recurring
|
|||||||
Description
|
Metric
|
Category
|
Start Date
|
End Date
|
Qty
|
Price
|
Ext. Price
|
Canvas Cloud Subscription
|
FTE
|
Cloud SaaS Subscription
|
1/1/2017
|
12/31/2017
|
[***]
|
USD [***]
|
USD [***]
|
Custom URL
|
$[***]
(Per Year)
|
Subscription Add-ons
|
1/1/2017
|
12/31/2017
|
1
|
USD [***]
|
USD [***]
|
24x7 Support
|
20% of Subscription (Min $[***])
|
Support
|
1/1/2017
|
12/31/2017
|
1
|
USD [***]
|
USD [***]
|
Tier 1 Support
|
User
|
Support
|
1/1/2017
|
12/31/2017
|
[***]
|
USD [***]
|
USD [***]
|
SIS Maintenance
|
Per Year
|
Professional Services
|
1/1/2017
|
12/31/2017
|
1
|
USD [***]
|
USD [***]
|
JavaScript Override
|
Per Year
|
Professional Services
|
1/1/2017
|
12/31/2017
|
1
|
USD [***]
|
USD [***]
|
Year 1 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Canvas Cloud Subscription
|
FTE
|
Cloud SaaS Subscription
|
1/1/2018
|
12/31/2018
|
[***]
|
USD [***]
|
USD [***]
|
Custom URL
|
$[***] (Per Year)
|
Subscription Add-ons
|
1/1/2018
|
12/31/2018
|
1
|
USD [***]
|
USD [***]
|
24x7 Support
|
20% of Subscription (Min $[***])
|
Support
|
1/1/2018
|
12/31/2018
|
1
|
USD [***]
|
USD [***]
|
Tier 1 Support
|
User
|
Support
|
1/1/2018
|
12/31/2018
|
[***]
|
USD [***]
|
USD [***]
|
SIS Maintenance
|
Per Year
|
Professional Services
|
1/1/2018
|
12/31/2018
|
1
|
USD [***]
|
USD [***]
|
JavaScript Override
|
Per Year
|
Professional Services
|
1/1/2018
|
12/31/2018
|
1
|
USD [***]
|
USD [***]
|
Description
|
Metric
|
Category
|
Start Date
|
End Date
|
Qty
|
Price
|
Ext. Price
|
Year 2 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Canvas Cloud Subscription
|
FTE
|
Cloud SaaS Subscription
|
1/1/2019
|
12/31/2019
|
[***]
|
USD [***]
|
USD [***]
|
Custom URL
|
$[***]
(Per Year)
|
Subscription Add-ons
|
1/1/2019
|
12/31/2019
|
1
|
USD [***]
|
USD [***]
|
24x7 Support
|
20% of Subscription (Min $[***])
|
Support
|
1/1/2019
|
12/31/2019
|
1
|
USD [***]
|
USD [***]
|
Tier 1 Support
|
User
|
Support
|
1/1/2019
|
12/31/2019
|
[***]
|
USD [***]
|
USD [***]
|
SIS Maintenance
|
Per Year
|
Professional Services
|
1/1/2019
|
12/31/2019
|
1
|
USD [***]
|
USD [***]
|
JavaScript Override
|
Per Year
|
Professional Services
|
1/1/2019
|
12/31/2019
|
1
|
USD [***]
|
USD [***]
|
Year 3 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Canvas Cloud Subscription
|
FTE
|
Cloud SaaS Subscription
|
1/1/2020
|
12/31/2020
|
[***]
|
USD [***]
|
USD [***]
|
Custom URL
|
$[***]
(Per Year)
|
Subscription Add-ons
|
1/1/2020
|
12/31/2020
|
1
|
USD [***]
|
USD [***]
|
24x7 Support
|
20% of Subscription (Min $[***])
|
Support
|
1/1/2020
|
12/31/2020
|
1
|
USD [***]
|
USD [***]
|
Tier 1 Support
|
User
|
Support
|
1/1/2020
|
12/31/2020
|
[***]
|
USD [***]
|
USD [***]
|
SIS Maintenance
|
Per Year
|
Professional Services
|
1/1/2020
|
12/31/2020
|
1
|
USD [***]
|
USD [***]
|
JavaScript Override
|
Per Year
|
Professional Services
|
1/1/2020
|
12/31/2020
|
1
|
USD [***]
|
USD [***]
|
Year 4 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Canvas Cloud Subscription
|
FTE
|
Cloud SaaS Subscription
|
1/1/2021
|
12/31/2021
|
[***]
|
USD [***]
|
USD [***]
|
Custom URL
|
$[***]
(Per Year)
|
Subscription Add-ons
|
1/1/2021
|
12/31/2021
|
1
|
USD [***]
|
USD [***]
|
24x7 Support
|
20% of Subscription (Min $[***])
|
Support
|
1/1/2021
|
12/31/2021
|
1
|
USD [***]
|
USD [***]
|
Tier 1 Support
|
User
|
Support
|
1/1/2021
|
12/31/2021
|
[***]
|
USD [***]
|
USD [***]
|
SIS Maintenance
|
Per Year
|
Professional Services
|
1/1/2021
|
12/31/2021
|
1
|
USD [***]
|
USD [***]
|
JavaScript Override
|
Per Year
|
Professional Services
|
1/1/2021
|
12/31/2021
|
1
|
USD [***]
|
USD [***]
|
Year 5 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Total
|
|
|
|
|
|
|
USD [***]
|
Non-Recurring
|
|||||||
Description
|
Metric
|
Category
|
Start Date
|
End Date
|
Qty
|
Price
|
Ext. Price
|
Standard Implementation
|
Per Implementation
|
Implementation
|
|
|
1
|
USD [***]
|
USD [***]
|
Onsite Training (1 Day) Travel Expenses Included
|
Per Each
|
Training
|
|
|
2
|
USD [***]
|
USD [***]
|
Tier 1 Support Setup
|
One Time Fee
|
Support
|
|
|
1
|
USD [***]
|
USD [***]
|
White Glove Migration
|
Per Event
|
Migration
|
|
|
1
|
USD [***]
|
USD [***]
|
SIS Integration
|
Per Event
|
Professional Services
|
|
|
1
|
USD [***]
|
USD [***]
|
Professional Services Retainer
|
Per Event
|
Professional Services
|
|
|
1
|
USD [***]
|
USD [***]
|
Year 1 Sub-Total
|
|
|
|
|
|
|
USD [***]
|
Total
|
|
|
|
|
|
|
USD [***]
|
Canvas
|
Deliverables
|
As needed, your implementation will include the following:
Completion of your Canvas Implementation is based on the completion of specific milestones. Hours are not tracked nor are they required to be purchased separately. Your Canvas implementation is deemed complete once the following success criteria are met. Success criteria and project plans may be altered to meet your needs with agreement between your project lead and your Canvas Implementation Consultant. After implementation, if additional assistance is needed, hours may be purchased with an Implementation Consultant at $[***] an hour.
Success Criteria:
• Authentication: The Customer has successfully configured authentication. Users can successfully log in through configured solution (LDAP, SAML, CAS, Canvas Authentication)
• Branding: The Customer knows how to access the Theme Editor and branding has been applied to the Canvas instance.
• Support: Support has been successfully configured and tickets are successfully routed between Customer and Instructure.
• Training: The Customer knows how to access trainings.
• SIS: User, course and assignment data has been successfully added to Canvas from the SIS solution.
• Migration: The Customer has a migration strategy and is able to migrate content through the Canvas interface.
Implementation typically takes between 60-90 days, with actual times varying greatly depending on the institution’s goals and technical expertise. The end date of the implementation is determined in agreement with your project lead and your Canvas Implementation Consultant.
Access to guides, public courses, and best practices documentation. Documented best practices for driving high Canvas adoption and usage.
Expertise and best practices on any Data Warehouse import and automation work with Canvas. This includes access to API documentation and consulting with Customer resources on Customer initiated strategy.
|
Access to unlimited instructor-led online training for up to [***] named users from contracted date until the earlier of 12 months after subscription start date or the last date of the contracted subscription
|
Canvas FTE
|
|
Description
|
|
FTE means the number of full-time equivalent students calculated in accordance with the definition published by the Integrated Postsecondary Education Data System.
|
|
Canvas FTE Data Storage
|
|
Description
|
|
[***] MB/subscription metric (FTE/User/Enrollment) of storage is included in the annual subscription fee. Additional storage can be purchased for $[***] per 500 MB per total subscription metric count.
|
Bridgepoint Education
|
|
Instructure, Inc.
|
||
|
|
|
|
|
Signature:
|
/s/ Andrew Shean
|
|
Signature:
|
/s/ Mathew Searle
|
Name:
|
Andrew Shean
|
|
Name:
|
Mathew Searle
|
Title:
|
Chief academic learning officer
|
|
Title:
|
Sr. Finance Manager
|
Date:
|
Sep 16, 2016
|
|
Date:
|
Sep 20, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Federle
|
|
Name:
|
Michael Federle
|
|
Title:
|
President & Chief Operating Officer
|
|
Date:
|
7/20/2016
|
|
|
|
|
By:
|
/s/ Andrew Clark
|
|
Name:
|
Andrew Clark
|
|
Title:
|
President & CEO
|
|
Date:
|
7/6/2016
|
|
|
|
|
By:
|
/s/ Craig D. Swenson
|
|
Name:
|
Craig D. Swenson
|
|
Title:
|
President & CEO
|
|
Date:
|
7/12/2016
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Bridgepoint Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ ANDREW S. CLARK
|
|
|
Andrew S. Clark
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Bridgepoint Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ KEVIN ROYAL
|
|
|
Kevin Royal
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ ANDREW S. CLARK
|
|
|
Andrew S. Clark
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ KEVIN ROYAL
|
|
|
Kevin Royal
Chief Financial Officer
(Principal Financial Officer)
|
|
|