UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2011
Grand Canyon Education, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34211 | 20-3356009 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 3300 W. Camelback Road Phoenix, Arizona |
85017 |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (602) 639-7500
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 7, 2011, Grand Canyon Education, Inc. (the “Company”) reported its results for the
third quarter of 2011. The press release dated November 7, 2011 is furnished as Exhibit 99.1 to
this report.
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
(a) In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2011, we determined that a change to our
methodology relating to the manner in which we
estimate our allowance for doubtful accounts was required.
In accordance
with our institutional policy, all prospective students are required to select
both a primary and secondary payment option with respect to amounts due to us for
tuition, fees and other expenses. The most common payment option for our students is
financial aid but students also choose personal cash, tuition reimbursement, or
direct bill to their employer. Financial aid loan funds are generally provided by
the Federal Direct Loan Program in two disbursements for each academic year.
The disbursements are usually received two to four weeks into the first course
of a payment period. These factors, together with the timing of students beginning their
programs, affect our operating cash flow including our accounts receivable balance.
In instances where a student selects financial aid as the primary payment option,
he or she often selects personal cash as the secondary option. If a student that has selected
financial aid as his or her primary payment option withdraws prior to the end of a course but
after the date that our institutional refund period has expired, the student will have incurred
the obligation to pay the full cost of the course. If the withdrawal occurs before the date at
which the student has earned 100% of his or her financial aid, we will have a return to
Title IV requirement and the student will owe us all amounts incurred that are in excess of
the amount of financial aid that the student earned and that we are entitled to retain.
In this case, we must collect the receivable using the student’s second payment option.
In cases where this second payment option is a withdrawn student’s personal cash, then this
amount will be due from the former student. Such receivables carry a higher risk of non-collection,
as the student is no longer enrolled in the University.
Under our
policy, we record an allowance for doubtful accounts for estimated losses
resulting from the inability, failure or refusal of our students to make
required payments. We determine the adequacy of our allowance for doubtful accounts
based on an analysis of our historical bad debt experience, current economic trends, and the aging of the accounts receivable.
We apply reserves to our receivables based upon an estimate of the risk presented by the age
of the receivables. We believe that this policy is the best way to predict the ultimate amount
of our receivables that will go uncollected as our receivable
balances are made up of a large number of small balances and we also believe that this policy conforms to industry practice.
While we continually refine our estimation process (similar to the refinements described below) in the
ordinary course, our general approach to estimating the allowance for doubtful accounts has remained the
same since we went public in November 2008. We have historically written off accounts receivable at the
earlier of the time the balance is deemed uncollectible, or one year after the revenue is generated.
We monitor our collections and write-off experience to assess whether
adjustments are necessary.
As part of our process of analyzing
our reserve balance at September 30, 2011, we for the first time disaggregated our accounts receivable balances
based on each student’s school status as of September 30, 2011 and each of the prior quarter ends between
June 30, 2010 (the quarter we transitioned to a “borrower-based,
non-term” or “BBAY” financial aid system,
where each student may begin a program and
be eligible to receive financial aid at any time throughout the year)
and June 30, 2011. In initiating this review, we had noted that there
had been an increase in the more mature receivables over the past few
quarters, once we had disaggregated our accounts receivable balances
we noted a significant change in the composition of our receivable
balances since our transition to BBAY in which the receivables due from former students had grown as a percentage of the total amount
outstanding during this period. We believe that this is
the result of several factors. First, under BBAY, a student must
generally complete two of the courses in a payment period to earn the
full financial aid award, as opposed to just a single course under
the term-based module approach, and as a result, we have experienced
an increase in the Title IV program funds that need to be returned to
lenders or the Department of Education. Second, we have historically been successful in collecting receivables, including
those due from former students as a result of the return to Title IV requirement, because the amount owed
by a particular student that is in excess of the amount of financial aid that the student earned and that we
are entitled to retain is often quite small. Due primarily to the ongoing economic conditions, we believe
that the level of motivation that former students have to pay off their balances due to us, based on such
factors as being able to receive transcripts or protecting their credit, has lessened over time. On the
other hand, we have implemented a number of operational changes during the past twelve months that have
resulted in more timely collections of balances due from active students. As our collection history over
the past year demonstrated that receivables due from former students are now becoming much more likely to go
uncollected, we concluded that our allowance for doubtful accounts needed to be adjusted.
Thus, we have changed our allowance calculation methodology such that receivables due from former students
are treated as a separate pool and are fully reserved for and written off in a much more accelerated timeframe.
The methodology for reserving for receivables due from current
students remains similar to our prior methodology given that we have not
seen a change in the payment patterns for this pool of students. We continue to reflect accounts
receivable with an offsetting allowance as long as management believes there is a reasonable possibility
of collection. Bad debt expense is recorded as an instructional costs and services expense in the income statement.
Because our
former students did not previously exhibit this collection behavior, the historical reserve
process that we had implemented and followed in prior periods did not include taking the additional
steps that are necessary to disaggregate our receivable balances by student based on enrollment status.
As a result of our new analysis, however, it now appears that this disaggregated
information is particularly relevant in determining the probability of loss and,
if it had been more readily available to us, could have been used to detect the change in the behavior of
our former students that manifested in the latter half of 2010 and in 2011.
Accordingly, the Audit Committee of the Board of Directors of the Company, together with
management and in consultation with Ernst & Young LLP, the Company’s independent registered public
accounting firm, determined on November 3, 2011 that, because we could have taken the additional steps necessary to develop
the disaggregated information for use in the analysis of our reserve requirements and resulting allowances for
2010 and 2011, the financial statements for the fiscal year ended December 31, 2010 and the fiscal quarters
ended June 30,2010, September 30, 2010, March 31, 2011 and June 30, 2011 should not be relied upon and should be restated to reflect the new
allowance calculation methodology.
The
Company’s management and Audit Committee have discussed the matters
disclosed in this filing with Ernst & Young LLP, the Company’s independent registered public accounting firm.
The Company expects to file its amended Annual Report on Form 10-K for the year ended December
31, 2010, its amended Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2011 and
its amended Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, each of which
will include the applicable restated financial statements and related disclosures, shortly before,
or concurrently with, the filing of its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2011. We expect to file our Quarterly Report in
Form 10-Q for the fiscal quarter ended September 30, 2011
on a timely basis on or prior to Wednesday,
November 9, 2011. The Company is still evaluating the level
of internal control deficiency that the restatements represent and
expects to report on its conclusion in its Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2011 and in
the amended filings referenced above, as applicable.
Item 9.01. Financial Statements and Exhibits.
99.1 Press Release dated November 7, 2011
Cautionary Note Regarding Forward-looking Statements:
To the extent that statements in this Current Report on Form 8-K are not strictly historical,
including statements relating to future events, future financial performance, strategies
expectations, competitive environment, regulation, and availability of resources, such statements
are forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The forward-looking statements contained in this Current Report on
Form 8-K should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which such performance or results will
be achieved. Forward-looking statements are based on information available at the time those
statements are made or management’s good faith belief as of that time with respect to future
events, and are subject to risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to, the risks and
other uncertainties that are described in the Company’s filings with the Securities and Exchange
Commission including the most recent reports on Forms 10-K, 10-Q and 8-K, and any amendments
thereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GRAND CANYON EDUCATION, INC. |
||||
| Date: November 7, 2011 | By: | /s/ Daniel E. Bachus | ||
| Daniel E. Bachus | ||||
| Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
||||
EXHIBIT INDEX
| Exhibit | ||||
| No. | Description | |||
| 99.1 | Press Release dated November 7, 2011 |
|||
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Investor Relations Contact:
Dan Bachus
Chief Financial Officer
Grand Canyon Education, Inc.
602-639-6648
[email protected]
Dan Bachus
Chief Financial Officer
Grand Canyon Education, Inc.
602-639-6648
[email protected]
GRAND CANYON EDUCATION, INC. REPORTS
THIRD QUARTER 2011 RESULTS
THIRD QUARTER 2011 RESULTS
ARIZONA, November 7, 2011—Grand Canyon Education, Inc. (NASDAQ: LOPE), a regionally
accredited provider of online and campus-based post-secondary education services, today announced
financial results for the quarter ended September 30, 2011.
(more)
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
In connection with the preparation of
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011,
we determined that a change to our methodology
relating to the manner in which we estimate our allowance for doubtful accounts was required.
In
accordance with our institutional policy, all prospective students
are required to select both a primary and secondary payment option
with respect to amounts due to us for tuition, fees and other expenses.
The most common payment option for our students is financial aid but students
also choose personal cash, tuition reimbursement, or direct bill to their employer.
Financial aid loan funds are generally provided by the Federal Direct Loan Program
in two disbursements for each academic year. The disbursements are usually received two
to four weeks into the first course of a payment period. These factors, together with the
timing of students beginning their programs, affect our operating cash flow including our
accounts receivable balance. In instances where a student selects financial aid as the primary
payment option, he or she often selects personal cash as the secondary option. If a student that has
selected financial aid as his or her primary payment option withdraws prior to the end of a
course but after the date that our institutional refund period has expired, the student will have
incurred the obligation to pay the full cost of the course. If the withdrawal occurs before the date
at which the student has earned 100% of his or her financial aid, we will have a return to Title
IV requirement and the student will owe us all amounts incurred that are in excess of the amount of
financial aid that the student earned and that we are entitled to retain. In this case, we
must collect the receivable using the student’s second payment option. In cases where this second payment
option is a withdrawn student’s personal cash, then this amount will be due from the former student.
Such receivables carry a higher risk of non-collection, as the student is no longer enrolled in the University.
Under our policy,
we record an allowance for doubtful accounts for estimated losses resulting
from the inability, failure or refusal of our students to make required payments.
We determine the adequacy of our allowance for doubtful accounts based on an analysis
of our historical bad debt experience, current economic trends, and the aging of the accounts receivable.
We apply reserves to our receivables based upon an estimate of the risk presented by the age
of the receivables. We believe that this policy is the best way to predict the ultimate amount
of our receivables that will go uncollected as our receivable
balances are made up of a large number of small balances and we also believe that this policy conforms to industry practice.
While we continually refine our estimation process (similar to the refinements described below)
in the ordinary course, our general approach to estimating the allowance for doubtful accounts
has remained the same since we went public in November 2008. We have historically written off accounts
receivable at the earlier of the time the balance is deemed uncollectible, or one year after the revenue
is generated. We monitor our collections and write-off experience to assess whether adjustments are necessary.
As part of our process of analyzing our reserve balance at September 30, 2011, we for the first time
disaggregated our accounts receivable balances based on each student’s school status as of September 30, 2011 and
each of the prior quarter ends between June 30, 2010 (the quarter we
transitioned to a “borrower-based, non-term” or
“BBAY” financial aid system, where each student may begin a program and be eligible to receive financial aid at
any time throughout the year) and June 30, 2011. In initiating this
review, we had noted that there had been an increase in the more
mature receivables over the past few quarters. Once we had
disaggregated our accounts receivable we noted a significant
change in the composition of our receivable balances since our
transition to BBAY in which the receivables due from former students had grown as a percentage of
the total amount outstanding during this period. We believe that this is the result of several
factors. First, under BBAY, a student must generally complete two of
the courses in a payment period to earn the full financial aid award,
as opposed to just a single course under the term-based module
approach, and, as a result, we have experienced an increase in the
Title IV program funds that need to be returned to lenders or the
Department of Education. Second, we have historically been successful in
collecting receivables, including those due from former students as a result of the return to Title IV requirement,
because the amount owed by a particular student that is in excess of the amount of financial aid that the student
earned and that we are entitled to retain is often quite small. Due primarily to the ongoing economic conditions, we
believe that the level of motivation that former students have to pay off their balances due to us, based on such
factors as being able to receive transcripts or protecting their credit, has lessened over time. On the other hand, we
have implemented a number of operational changes during the past twelve months that have resulted in more timely
collections of balances due from active students. As our collection history over the past year demonstrated that
receivables due from former students are now becoming much more likely to go uncollected, we concluded that our
allowance for doubtful accounts needed to be adjusted. Thus, we have changed our allowance calculation
methodology such that receivables due from former students are treated as a separate pool and are fully reserved for
and written off in a much more accelerated timeframe. The methodology for reserving for receivables due from
current students remains similar to our prior methodology given that we have not seen a change in the payment patterns for this pool of
students. We continue to reflect accounts receivable with an offsetting allowance as long as management believes
there is a reasonable possibility of collection. Bad debt expense is recorded as an instructional costs and services
expense in the income statement.
For
the three months ended September 30, 2011 (certain 2010 amounts
are restated):
| • | Net revenue increased 10.1% to $108.9 million for the third quarter of 2011, compared to
$98.9 million for the third quarter of 2010. |
| • | At September 30, 2011, our enrollment was approximately 44,500, an increase of 5.2% from our
enrollment of approximately 42,300 at September 30, 2010. |
| • | Operating income for the
third quarter of 2011 was $20.7 million, an increase of 11.7% as
compared to $18.5 million for the same period in 2010. The operating margin for the third
quarter of 2011 was 19.0%, compared to 18.7% for the same period in 2010. |
| • | Adjusted EBITDA increased
18.9% to $27.5 million for the third quarter of 2011, compared to
$23.1 million for the same period in 2010. |
| • | The tax rate in the third
quarter of 2011 was 37.3% compared to 41.5% in the third quarter of
2010. The decrease in the effective tax rate was primarily due to certain non-recurring tax
items, which had the effect of decreasing our effective tax rate in the third quarter of 2011
and increasing the effective tax rate in the third quarter of 2010. |
| • | Net income increased 19.8%
to $12.9 million for the third quarter of 2011, compared to $10.7
million for the same period in 2010. |
| • | Diluted net income per share was $0.29 for the third quarter of 2011, compared to $0.23 for
the same period in 2010. |
For
the nine months ended September 30, 2011 (certain 2010 amounts
are restated):
| • | Net revenues increased 9.8% to $313.7 million, compared to $285.8 million for the same period
in 2010. |
| • | Operating income for the
nine months ended September 30, 2011 was $58.8 million, an increase
of 19.8% as compared to $49.1 million for the same period in 2010. The operating margin for the
nine months ended September 30, 2011 was 18.8%, compared to 17.2% for the same period in 2010. |
| • | Adjusted EBITDA increased
24.4% to $76.6 million for the nine months ended September 30,
2011, compared to $61.6 million for the same period in 2010. |
| • | The tax rate in 2011 was 39.9% compared to 40.4% for the same period in 2010. The decrease
in the effective tax rate was primarily due to certain non-recurring tax items, which had the
effect of decreasing our effective tax rate in the third quarter of 2011 and increasing the
effective tax rate in the third quarter of 2010. |
| • | Net income increased 21.6%
to $35.2 million for the nine months ended September 30, 2011,
compared to $29.0 million for the same period in 2010. |
| • | Diluted net income per share
was $0.78 for the nine months ended September 30, 2011, compared
to $0.62 for the same period in 2010. |
Balance Sheet and Cash Flow
As of September 30, 2011, the University had unrestricted cash and cash equivalents of $19.0
million compared to $33.6 million at the end of 2010 and restricted cash and cash equivalents at
September 30, 2011 and December 31, 2010 of $47.7 million and $52.9 million, respectively.
The University generated $65.5 million in cash from operating activities for the nine months ended
September 30, 2011 compared to $80.5 million for the same period in 2010. Cash provided by
operations in 2011 and 2010 resulted from net income plus non cash charges for provision for bad
debts, depreciation and amortization, non-capitalizable system costs, share-based compensation, and
changes in working capital, and in the nine months ended September 30, 2011, cash provided by
operating activities has been reduced by $5.2 million related to the payment in connection with the
qui tam matter. Capital expenditures in 2011 of $61.5 million were primarily related to ground
campus building projects such as a new dormitory and events arena to support our increasing
traditional ground student enrollment as well as purchases of computer equipment, other internal
use software projects and furniture and equipment. Capital expenditures in 2010 of $39.6 million
primarily consisted of ground campus building projects, purchases of computer equipment, and
software costs to complete our transition from Datatel to Campus Vue and Great Plains, other
internal use software projects, furniture and equipment to support our increasing student
enrollment. In the first nine months of 2010, we had a $27.4 million increase in restricted cash
associated with our transition to a “borrower-based, non-term” or “BBAY” financial aid system.
During the first nine months of 2011, $23.8 million of cash used in financing activities was
primarily related to $22.4 million used to purchase treasury stock in accordance with the
University’s share repurchase program and principal payments on notes payable and capital leases
totaled $2.9 million. During the first nine months of 2010 cash
used in financing activities
was $.9 million as proceeds from the exercise of stock options and the excess tax benefits from
share-based compensation were partially offset by principal payments on notes payable and capital
lease obligations of $2.2 million.
(more)
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
Fourth Quarter 2011 Outlook
Our guidance for the fourth quarter of 2011 is the following:
Revenue will be between $112 and $116 million. Our target operating
margin is 18.5% and our target adjusted EBITDA margin is 25.0% for the fourth quarter of 2011.
Forward-Looking Statements
This news release contains “forward-looking statements” which include information relating to
future events, future financial performance, strategies expectations, competitive environment,
regulation, and availability of resources. These forward-looking statements include, without
limitation, statements regarding: proposed new programs; expectations that regulatory developments
or other matters will not have a material adverse effect on our financial position, results of
operations, or liquidity; statements concerning projections, predictions, expectations, estimates,
or forecasts as to our business, financial and operational results, and future economic
performance; and statements of management’s goals and objectives and other similar expressions
concerning matters that are not historical facts. Words such as “may,” “should,” “could,” “would,”
“predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates” and similar expressions, as well as statements in future tense, identify
forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and
will not necessarily be accurate indications of the times at, or by, which such performance or
results will be achieved. Forward-looking statements are based on information available at the time
those statements are made or management’s good faith belief as of that time with respect to future
events, and are subject to risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to: our failure to
comply with the extensive regulatory framework applicable to our industry, including Title IV of
the Higher Education Act and the regulations thereunder, state laws and regulatory requirements,
and accrediting commission requirements; the results of the ongoing program review being conducted
by the Department of Education of our compliance with Title IV program requirements, and possible
fines or other administrative sanctions resulting therefrom; the ability of our students to obtain
federal Title IV funds, state financial aid, and private financing; risks associated with changes
in applicable federal and state laws and regulations and accrediting commission standards,
including pending rulemaking by the Department of Education; potential damage to our reputation or
other adverse effects as a result of negative publicity in the media, in the industry or in
connection with governmental reports or investigations or otherwise, affecting us or other
companies in the for-profit postsecondary education sector; the
impact of the restatement of our prior financial results; our ability to hire and train new, and
develop and train existing, enrollment counselors; the pace of growth of our enrollment; our
ability to convert prospective students to enrolled students and to retain active students; our
success in updating and expanding the content of existing programs and developing new programs in a
cost-effective manner or on a timely basis; industry competition, including competition for
qualified executives and other personnel; risks associated with the competitive environment for
marketing our programs; failure on our part to keep up with advances in technology that could
enhance the online experience for our students; the extent to which obligations under our loan
agreement, including the need to comply with restrictive and financial covenants and to pay
principal and interest payments, limits our ability to conduct our operations or seek new business
opportunities; potential decreases in enrollment, the payment of refunds or other negative impacts
on our operating results as a result of our change from a “term-based” financial aid system to a
BBAY financial aid system; our ability to manage future growth effectively; general adverse
economic conditions or other developments that affect job prospects in our core disciplines; and
other factors discussed in reports on file with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date the statements are made. You should not put
undue reliance on any forward-looking statements. We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions, or changes in other factors affecting
forward-looking information, except to the extent required by applicable securities laws. If we do
update one or more forward-looking statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking statements.
(more)
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
Conference Call
Grand Canyon Education, Inc. will discuss its third quarter 2011 results and 2011 outlook during a
conference call scheduled for today, November 7, 2011 at 4:30 p.m. Eastern time (ET). To
participate in the live call, investors should dial 877-815-5362 (domestic and Canada) or
706-679-7806 (international), passcode 10677185 at 4:25 p.m. (ET). The Webcast will be available on
the Grand Canyon Education, Inc. Web site at www.gcu.edu.
A replay of the call will be available approximately two hours following the conclusion of the call
through November 6, 2012, at 800-642-1687 (domestic) or 706-645-9291 (international), passcode
10677185. It will also be archived at www.gcu.edu in the investor relations
section for 60 days.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. is a regionally accredited provider of postsecondary education
services focused on offering graduate and undergraduate degree programs in its core disciplines of
education, business, healthcare and liberal arts. In addition to its online programs, it offers
programs at its approximately 115 acre traditional campus in Phoenix, Arizona and onsite at the
facilities of employers. Approximately 44,500 students were enrolled as of September 30, 2011. For
more information about Grand Canyon Education, Inc., please visit http://www.gcu.edu.
| * | Grand Canyon Education, Inc. is regionally accredited by The Higher Learning Commission of
the North Central Association of Colleges and Schools (NCA), http://www.ncahlc.org. Grand
Canyon University, 3300 W. Camelback Road, Phoenix, AZ 85017, www.gcu.edu. |
###
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
GRAND CANYON EDUCATION, INC.
Consolidated Income Statements
(Unaudited)
Consolidated Income Statements
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Restated | Restated | |||||||||||||||
Net revenue |
$ | 108,909 | $ | 98,946 | $ | 313,736 | $ | 285,794 | ||||||||
Costs and expenses: |
||||||||||||||||
Instructional costs and services |
48,933 | 45,717 | 144,162 | 133,609 | ||||||||||||
Selling and promotional, including $151 and $2,702
for the three months ended September 30, 2011 and
2010, respectively, and $612 and $7,694 for the nine
months ended September 30, 2011 and 2010,
respectively, to related parties |
31,248 | 28,103 | 88,789 | 83,955 | ||||||||||||
General and administrative |
7,145 | 6,608 | 21,015 | 18,888 | ||||||||||||
Lease termination fee |
922 | — | 922 | — | ||||||||||||
Exit costs |
— | 27 | — | 232 | ||||||||||||
Total costs and expenses |
88,248 | 80,455 | 254,888 | 236,684 | ||||||||||||
Operating income |
20,661 | 18,491 | 58,848 | 49,110 | ||||||||||||
Interest expense |
(170 | ) | (176 | ) | (306 | ) | (682 | ) | ||||||||
Interest income |
20 | 33 | 78 | 131 | ||||||||||||
Income before income taxes |
20,511 | 18,348 | 58,620 | 48,559 | ||||||||||||
Income tax expense |
7,643 | 7,606 | 23,398 | 19,603 | ||||||||||||
Net income |
$ | 12,868 | $ | 10,742 | $ | 35,222 | $ | 28,956 | ||||||||
Net income per common share: |
||||||||||||||||
Basic |
$ | 0.29 | $ | 0.23 | $ | 0.79 | $ | 0.63 | ||||||||
Diluted |
$ | 0.29 | $ | 0.23 | $ | 0.78 | $ | 0.62 | ||||||||
Shares used in computing net income per common share: |
||||||||||||||||
Basic |
44,302 | 45,746 | 44,845 | 45,715 | ||||||||||||
Diluted |
44,787 | 46,351 | 45,293 | 46,413 | ||||||||||||
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
GRAND CANYON EDUCATION, INC.
Adjusted EBITDA
Adjusted EBITDA is defined as net income plus interest expense net of interest income, plus income
tax expense, and plus depreciation and amortization (EBITDA), as adjusted for (i) royalty payments
incurred pursuant to an agreement with our former owner that has been terminated as of April 15,
2008; (ii) contributions to Arizona school tuition organizations in lieu of state income taxes,
which we typically make in the fourth quarter of a fiscal year; (iii) exit costs, if any; (iv)
contract termination fees, if any and (v) share-based compensation. We present Adjusted EBITDA
because we consider it to be an important supplemental measure of our operating performance. We
also make certain compensation decisions based, in part, on our operating performance, as measured
by Adjusted EBITDA, and our loan agreement requires us to comply with covenants that include
performance metrics substantially similar to Adjusted EBITDA. All of the adjustments made in our
calculation of Adjusted EBITDA are adjustments to items that management does not consider to be
reflective of our core operating performance. Management considers our core operating performance
to be that which can be affected by our managers in any particular period through their management
of the resources that affect our underlying revenue and profit generating operations during that
period. Royalty expenses paid to our former owner, contributions made to Arizona school tuition
organizations in lieu of the payment of state income taxes, estimated litigation losses, exit
costs, share-based compensation, and contract termination fees are not considered reflective of our
core performance.
We believe Adjusted EBITDA allows us to compare our current operating results with
corresponding historical periods and with the operational performance of other companies in our
industry because it does not give effect to potential differences caused by variations in capital
structures (affecting relative interest expense, including the impact of write-offs of deferred
financing costs when companies refinance their indebtedness), tax positions (such as the impact on
periods or companies of changes in effective tax rates or net operating losses), the book
amortization of intangibles (affecting relative amortization expense), and other items that we do
not consider reflective of underlying operating performance. We also present Adjusted EBITDA
because we believe it is frequently used by securities analysts, investors, and other interested
parties as a measure of performance.
In evaluating Adjusted EBITDA, investors should be aware that in the future we may incur
expenses similar to the adjustments described above. Our presentation of Adjusted EBITDA should
not be construed as an inference that our future results will be unaffected by expenses that are
unusual, non-routine, or non-recurring. Adjusted EBITDA has limitations as an analytical tool, and
you should not consider it in isolation, or as a substitute for net income, operating income, or
any other performance measure derived in accordance with and reported under GAAP or as an
alternative to cash flow from operating activities or as a measure of our liquidity. Some of these
limitations are that it does not reflect:
| • | cash expenditures for capital expenditures or contractual commitments; |
||
| • | changes in, or cash requirement for, our working capital requirements; |
||
| • | interest expense, or the cash required to replace assets that are being depreciated
or amortized; and |
||
| • | the impact on our reported results of earnings or charges resulting from the items
for which we make adjustments to our EBITDA, as described above and set forth in the
table below. |
In addition, other companies, including other companies in our industry, may calculate these
measures differently than we do, limiting the usefulness of Adjusted EBITDA as a comparative
measure. Because of these limitations, Adjusted EBITDA should not be considered as a substitute
for net income, operating income, or any other performance measure derived in accordance with GAAP,
or as an alternative to cash flow from operating activities or as a measure of our liquidity. We
compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA
only supplementally.
The following table provides a reconciliation of net income to Adjusted EBITDA, which is a non-GAAP
measure for the periods indicated:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||
| Restated | Restated | |||||||||||||||
Net income |
$ | 12,868 | $ | 10,742 | $ | 35,222 | $ | 28,956 | ||||||||
Plus: interest expense net of interest income |
150 | 143 | 228 | 551 | ||||||||||||
Plus: income tax expense |
7,643 | 7,606 | 23,398 | 19,603 | ||||||||||||
Plus: depreciation and amortization |
4,154 | 3,168 | 11,832 | 8,329 | ||||||||||||
EBITDA |
24,815 | 21,659 | 70,680 | 57,439 | ||||||||||||
Plus: royalty to former owner |
74 | 74 | 222 | 222 | ||||||||||||
Plus: lease termination costs |
922 | — | 922 | — | ||||||||||||
Plus: exit costs |
— | 27 | — | 232 | ||||||||||||
Plus: share-based compensation |
1,667 | 1,347 | 4,797 | 3,685 | ||||||||||||
Adjusted EBITDA |
$ | 27,478 | $ | 23,107 | $ | 76,621 | $ | 61,578 | ||||||||
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
GRAND CANYON EDUCATION, INC.
Consolidated Balance Sheets
Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| (In thousands, except par value) | 2011 | 2010 | ||||||
| (Unaudited) | Restated | |||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 18,999 | $ | 33,637 | ||||
Restricted cash and cash equivalents |
47,177 | 52,178 | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $14,618 and $30,312 (Restated) at September 30, 2011 and December 31, 2010, respectively |
16,333 | 17,983 | ||||||
Income taxes receivable |
8,383 | 8,415 | ||||||
Deferred income taxes |
6,788 | 16,078 | ||||||
Other current assets |
9,104 | 4,834 | ||||||
Total current assets |
106,784 | 133,125 | ||||||
Property and equipment, net |
179,545 | 123,999 | ||||||
Restricted cash |
555 | 760 | ||||||
Prepaid royalties |
6,122 | 6,579 | ||||||
Goodwill |
2,941 | 2,941 | ||||||
Deferred income taxes |
1,912 | 2,800 | ||||||
Other assets |
5,201 | 4,892 | ||||||
Total assets |
$ | 303,060 | $ | 275,096 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 22,277 | $ | 15,693 | ||||
Accrued compensation and benefits |
9,768 | 13,633 | ||||||
Accrued liabilities |
9,134 | 9,477 | ||||||
Accrued litigation loss |
— | 5,200 | ||||||
Accrued exit costs |
— | 64 | ||||||
Income taxes payable |
1,068 | 829 | ||||||
Student deposits |
48,483 | 48,873 | ||||||
Deferred revenue |
34,746 | 15,034 | ||||||
Due to related parties |
464 | 10,346 | ||||||
Current portion of capital lease obligations |
892 | 1,673 | ||||||
Current portion of notes payable |
1,760 | 2,026 | ||||||
Total current liabilities |
128,592 | 122,848 | ||||||
Capital lease obligations, less current portion |
695 | 151 | ||||||
Other noncurrent liabilities |
6,772 | 2,715 | ||||||
Notes payable, less current portion |
20,329 | 21,881 | ||||||
Total liabilities |
156,388 | 147,595 | ||||||
Commitments and contingencies |
||||||||
Stockholders’ equity |
||||||||
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued
and outstanding at September 30, 2011 and December 31, 2010 |
— | — | ||||||
Common stock, $0.01 par value, 100,000 shares authorized; 45,938 and 45,811
shares issued and 44,331 and 45,761 shares outstanding at September 30, 2011
and December 31, 2010, respectively |
459 | 458 | ||||||
Treasury stock, at cost, 1,607 and 50 shares of common stock at September
30, 2011 and December 31, 2010, respectively |
(23,153 | ) | (782 | ) | ||||
Additional paid-in capital |
83,821 | 77,449 | ||||||
Accumulated other comprehensive loss |
(498 | ) | (445 | ) | ||||
Accumulated earnings |
86,043 | 50,821 | ||||||
Total stockholders’ equity |
146,672 | 127,501 | ||||||
Total liabilities and stockholders’ equity |
$ | 303,060 | $ | 275,096 | ||||
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
GRAND CANYON EDUCATION, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| (In thousands) | 2011 | 2010 | ||||||
| Restated | ||||||||
Cash flows provided by operating activities: |
||||||||
Net income |
$ | 35,222 | $ | 28,956 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Share-based compensation |
4,797 | 3,685 | ||||||
Excess tax benefits from share-based compensation |
— | (675 | ) | |||||
Amortization of debt issuance costs |
42 | 48 | ||||||
Provision for bad debts |
27,903 | 29,483 | ||||||
Depreciation and amortization |
12,054 | 8,551 | ||||||
Lease termination fee |
922 | — | ||||||
Non-capitalizable system conversion costs |
— | 4,013 | ||||||
Litigation settlement |
(5,200 | ) | — | |||||
Exit costs |
(64 | ) | (545 | ) | ||||
Deferred income taxes |
10,185 | (9,461 | ) | |||||
Other |
— | (67 | ) | |||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
(26,253 | ) | (39,280 | ) | ||||
Prepaid expenses and other |
(4,577 | ) | (4,260 | ) | ||||
Due to/from related parties |
(9,882 | ) | 3,584 | |||||
Accounts payable |
1,757 | 5,317 | ||||||
Accrued liabilities and employee related liabilities |
(4,208 | ) | 5,949 | |||||
Income taxes receivable/payable |
348 | (223 | ) | |||||
Deferred rent |
3,123 | 682 | ||||||
Deferred revenue |
19,712 | 10,009 | ||||||
Student deposits |
(390 | ) | 34,768 | |||||
Net cash provided by operating activities |
65,491 | 80,534 | ||||||
Cash flows used in investing activities: |
||||||||
Capital expenditures |
(61,515 | ) | (39,595 | ) | ||||
Change in restricted cash and cash equivalents |
5,206 | (52,603 | ) | |||||
Proceeds from sale or maturity of investments |
— | 487 | ||||||
Net cash used in investing activities |
(56,309 | ) | (91,711 | ) | ||||
Cash flows used in financing activities: |
||||||||
Principal payments on notes payable and capital lease obligations |
(2,856 | ) | (2,209 | ) | ||||
Debt issuance costs |
(70 | ) | — | |||||
Repurchase of common shares |
(22,371 | ) | (782 | ) | ||||
Excess tax benefits from share-based compensation |
— | 675 | ||||||
Net proceeds from exercise of stock options |
1,477 | 1,393 | ||||||
Net cash used in financing activities |
(23,820 | ) | (923 | ) | ||||
Net decrease in cash and cash equivalents |
(14,638 | ) | (12,100 | ) | ||||
Cash and cash equivalents, beginning of period |
33,637 | 62,571 | ||||||
Cash and cash equivalents, end of period |
$ | 18,999 | $ | 50,471 | ||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid for interest |
$ | 315 | $ | 533 | ||||
Cash paid for income taxes |
$ | 12,790 | $ | 29,528 | ||||
Supplemental disclosure of non-cash investing and financing activities |
||||||||
Purchases of property and equipment included in accounts payable |
$ | 4,827 | $ | 7,580 | ||||
Purchases of equipment through capital lease obligations |
$ | 801 | $ | 625 | ||||
Tax benefit of Spirit warrant intangible |
$ | 194 | $ | 160 | ||||
Shortfall tax expense from share-based compensation |
$ | 117 | $ | — | ||||
Grand Canyon Education, Inc. Reports Third Quarter 2011 Results
The following is a summary of our student enrollment at September 30, 2011 and 2010 (which
included less than 500 students pursuing non-degree certificates in each period) by degree type and
by instructional delivery method:
| September 30, 2011(1) | September 30, 2010(1) | |||||||||||||||
| # of Students | % of Total | # of Students | % of Total | |||||||||||||
Graduate degrees (2) |
17,497 | 39.3 | % | 18,128 | 42.9 | % | ||||||||||
Undergraduate degree |
26,989 | 60.7 | % | 24,158 | 57.1 | % | ||||||||||
Total |
44,486 | 100.0 | % | 42,286 | 100.0 | % | ||||||||||
| September 30, 2011(1) | September 30, 2010(1) | |||||||||||||||
| # of Students | % of Total | # of Students | % of Total | |||||||||||||
Online (3) |
39,447 | 88.7 | % | 38,593 | 91.3 | % | ||||||||||
Ground (4) |
5,039 | 11.3 | % | 3,693 | 8.7 | % | ||||||||||
Total |
44,486 | 100.0 | % | 42,286 | 100.0 | % | ||||||||||
| (1) | Enrollment at September 30, 2011 and 2010 represents individual students who attended a course during the last two
months of the calendar quarter. |
|
| (2) | Includes 1,808 and 977 students pursuing doctoral degrees at September 30, 2011 and 2010, respectively. |
|
| (3) | As of September 30, 2011 and 2010, 42.3% and 45.5%, respectively, of our online students are pursuing graduate degrees. |
|
| (4) | Includes both our traditional on-campus ground students, as well as our professional studies students. |
The following tables summarizes the unaudited quarterly results of operations as
originally reported and as restated for each of the three quarters of 2010 and for the year ended
December 31, 2010 and the first two quarters of 2011 with the restated amounts reflecting amounts
that would have been reported under our new allowance estimation
methodology.
| 2010 | ||||||||||||||||
| Second Quarter | Second Quarter | Third Quarter | Third Quarter | |||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Net revenue |
$ | 97,522 | $ | 97,522 | $ | 98,946 | $ | 98,946 | ||||||||
Costs and expenses: |
||||||||||||||||
Instructional costs and services |
41,742 | 51,232 | 42,071 | 45,717 | ||||||||||||
Selling and promotional |
28,976 | 28,976 | 28,103 | 28,103 | ||||||||||||
General and administrative |
6,176 | 6,176 | 6,607 | 6,608 | ||||||||||||
Estimated exit costs |
116 | 116 | 27 | 27 | ||||||||||||
Total costs and expenses |
77,010 | 86,500 | 76,808 | 80,455 | ||||||||||||
Operating income |
20,512 | 11,022 | 22,138 | 18,491 | ||||||||||||
Net interest expense |
(125 | ) | (125 | ) | (143 | ) | (143 | ) | ||||||||
Income before income taxes |
20,387 | 10,897 | 21,995 | 18,348 | ||||||||||||
Income tax expense |
7,991 | 4,163 | 9,077 | 7,606 | ||||||||||||
Net income available to common
stockholders |
$ | 12,396 | $ | 6,734 | $ | 12,918 | $ | 10,742 | ||||||||
Earnings per share: |
||||||||||||||||
Basic income per share(1) |
$ | 0.27 | $ | 0.15 | $ | 0.28 | $ | 0.23 | ||||||||
Diluted income per share(1) |
$ | 0.27 | $ | 0.14 | $ | 0.28 | $ | 0.23 | ||||||||
Basic weighted average shares outstanding |
45,724 | 45,724 | 45,746 | 45,746 | ||||||||||||
Diluted weighted average shares
outstanding |
46,557 | 46,557 | 46,351 | 46,351 | ||||||||||||
| (1) | The sum of quarterly income per share may not equal annual income per
share due to rounding. |
| 2010 | ||||||||||||||||
| Twelve Months Ended |
Twelve Months Ended |
|||||||||||||||
| Fourth Quarter As | Fourth Quarter | December 31, | December 31, | |||||||||||||
| Reported | As Restated | As Reported | As Restated | |||||||||||||
Net revenue |
$ | 100,031 | $ | 100,031 | $ | 385,825 | $ | 385,825 | ||||||||
Costs and expenses: |
||||||||||||||||
Instructional costs and services |
36,207 | 45,435 | 163,693 | 179,044 | ||||||||||||
Selling and promotional |
28,538 | 28,538 | 112,493 | 112,493 | ||||||||||||
General and administrative |
14,746 | 7,733 | 26,620 | 26,621 | ||||||||||||
Contract termination fees |
9,233 | 9,233 | 9,233 | 9,233 | ||||||||||||
Estimated exit costs |
26 | 26 | 258 | 258 | ||||||||||||
Total costs and expenses |
88,750 | 90,965 | 312,297 | 327,649 | ||||||||||||
Operating income |
11,281 | 9,066 | 73,528 | 58,176 | ||||||||||||
Net interest expense |
(170 | ) | (170 | ) | (721 | ) | (721 | ) | ||||||||
Income before income taxes |
11,111 | 8,896 | 72,807 | 57,455 | ||||||||||||
Income tax expense |
3,540 | 2,646 | 28,442 | 22,249 | ||||||||||||
Net income available to common
stockholders |
$ | 7,571 | $ | 6,250 | $ | 44,365 | $ | 35,206 | ||||||||
Earnings per share: |
||||||||||||||||
Basic income per share(1) |
$ | 0.17 | $ | 0.14 | $ | 0.97 | $ | 0.77 | ||||||||
Diluted income per share(1) |
$ | 0.16 | $ | 0.13 | $ | 0.96 | $ | 0.76 | ||||||||
Basic weighted average shares outstanding |
45,743 | 45,743 | 45,722 | 45,722 | ||||||||||||
Diluted weighted average shares
outstanding |
46,346 | 46,346 | 46,396 | 46,396 | ||||||||||||
| (1) | The sum of quarterly income per share may not equal annual income per
share due to rounding. |
| 2011 | ||||||||||||||||
| First Quarter | First Quarter | Second Quarter | Second Quarter | |||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Net revenue |
$ | 101,709 | $ | 101,709 | $ | 103,118 | $ | 103,118 | ||||||||
Costs and expenses: |
||||||||||||||||
Instructional costs and services |
45,830 | 48,875 | 45,709 | 46,354 | ||||||||||||
Selling and promotional |
29,832 | 29,832 | 27,709 | 27,709 | ||||||||||||
General and administrative |
6,832 | 6,832 | 7,038 | 7,038 | ||||||||||||
Total costs and expenses |
82,494 | 85,539 | 80,456 | 81,101 | ||||||||||||
Operating income |
19,215 | 16,170 | 22,662 | 22,017 | ||||||||||||
Net interest expense |
(75 | ) | (75 | ) | (3 | ) | (3 | ) | ||||||||
Income before income taxes |
19,140 | 16,095 | 22,659 | 22,014 | ||||||||||||
Income tax expense |
7,842 | 6,614 | 9,401 | 9,141 | ||||||||||||
Net income |
$ | 11,298 | $ | 9,481 | $ | 13,258 | $ | 12,873 | ||||||||
Earnings per share: |
||||||||||||||||
Basic income per share(1) |
$ | 0.25 | $ | 0.21 | $ | 0.30 | $ | 0.29 | ||||||||
Diluted income per share(1) |
$ | 0.25 | $ | 0.21 | $ | 0.29 | $ | 0.29 | ||||||||
Basic weighted average shares
outstanding |
45,590 | 45,590 | 44,658 | 44,658 | ||||||||||||
Diluted weighted average shares
outstanding |
46,089 | 46,089 | 45,018 | 45,018 | ||||||||||||
| (1) | The sum of quarterly income per share may not equal annual income per share due to rounding. |
The following is a summary of the changes on our balance sheet.
| As of June 30, 2010 | As of September 30, 2010 | |||||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Accounts receivable |
$ | 42,636 | $ | 33,146 | $ | 32,722 | $ | 19,586 | ||||||||
Deferred income taxes — current |
11,355 | 15,183 | 9,204 | 14,502 | ||||||||||||
Total current assets |
132,933 | 127,271 | 153,074 | 145,236 | ||||||||||||
Total assets |
237,813 | 232,151 | 281,542 | 273,704 | ||||||||||||
Accumulated earnings |
39,491 | 33,829 | 52,409 | 44,571 | ||||||||||||
Total stockholders’ equity |
113,307 | 107,645 | 127,105 | 119,267 | ||||||||||||
Total liabilities and stockholders’ equity |
237,813 | 232,151 | 281,542 | 273,704 | ||||||||||||
| As of December 31, 2010 | As of March 31, 2011 | |||||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Accounts receivable |
$ | 33,334 | $ | 17,983 | $ | 32,369 | $ | 13,972 | ||||||||
Deferred income taxes — current |
9,886 | 16,078 | 9,143 | 16,563 | ||||||||||||
Total current assets |
142,284 | 133,125 | 128,286 | 117,309 | ||||||||||||
Total assets |
284,255 | 275,096 | 286,464 | 275,487 | ||||||||||||
Accumulated earnings |
59,980 | 50,821 | 71,278 | 60,302 | ||||||||||||
Total stockholders’ equity |
136,660 | 127,501 | 135,313 | 124,336 | ||||||||||||
Total liabilities and stockholders’ equity |
284,255 | 275,096 | 286,464 | 275,487 | ||||||||||||
| As of June 30, 2011 | ||||||||
| As Reported | As Restated | |||||||
Accounts receivable |
$ | 32,120 | $ | 13,078 | ||||
Deferred income taxes — current |
6,230 | 13,911 | ||||||
Total current assets |
109,807 | 98,446 | ||||||
Total assets |
289,943 | 278,582 | ||||||
Accumulated earnings |
84,536 | 73,175 | ||||||
Total stockholders’ equity |
142,659 | 131,298 | ||||||
Total liabilities and stockholders’ equity |
289,943 | 278,582 | ||||||
The following is a summary of the changes on our statement of cash flows.
| Six Months Ended | Nine Months Ended | |||||||||||||||
| June 30, 2010 | September 30, 2010 | |||||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Net income |
$ | 23,876 | $ | 18,214 | $ | 36,794 | $ | 28,956 | ||||||||
Provision for bad debts |
10,273 | 19,763 | 16,347 | 29,483 | ||||||||||||
Deferred income taxes |
(5,974 | ) | (9,802 | ) | (4,163 | ) | (9,461 | ) | ||||||||
Net cash provided by operating activities |
30,127 | 30,127 | 80,534 | 80,534 | ||||||||||||
| Three Months Ended | ||||||||||||||||
| Year Ended December 31, 2010 | March 31, 2011 | |||||||||||||||
| As Reported | As Restated | As Reported | As Restated | |||||||||||||
Net income |
$ | 44,365 | $ | 35,206 | $ | 11,298 | $ | 9,481 | ||||||||
Provision for bad debts |
23,360 | 38,712 | 6,988 | 10,034 | ||||||||||||
Deferred income taxes |
179 | (6,013 | ) | 1,004 | (224 | ) | ||||||||||
Net cash provided by operating activities |
84,104 | 84,104 | 23,413 | 23,413 | ||||||||||||
| Six Months Ended | ||||||||
| June 30, 2011 | ||||||||
| As Reported | As Restated | |||||||
Net income |
$ | 24,556 | $ | 22,354 | ||||
Provision for bad debts |
14,586 | 18,277 | ||||||
Deferred income taxes |
2,881 | 1,392 | ||||||
Net cash provided by operating activities |
36,026 | 36,026 | ||||||