Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34272 | |
Entity Registrant Name | ZOVIO INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 59-3551629 | |
Entity Address, Address Line One | 1811 E. Northrop Blvd, | |
Entity Address, City or Town | Chandler | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85286 | |
City Area Code | 858 | |
Local Phone Number | 668-2586 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ZVO | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 32,183,583 | |
Entity Central Index Key | 0001305323 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 86,628 | $ 69,280 |
Restricted cash | 26,633 | 23,257 |
Investments | 1,339 | 2,502 |
Accounts receivable, net of allowance for credit losses of $12.4 million and $13.7 million at September 30, 2020 and December 31, 2019, respectively | 39,709 | 34,951 |
Prepaid expenses and other current assets | 20,145 | 20,524 |
Total current assets | 174,454 | 150,514 |
Property and equipment, net | 31,431 | 34,294 |
Operating lease assets | 21,482 | 18,615 |
Goodwill and intangibles, net | 40,597 | 44,419 |
Other long-term assets | 3,118 | 2,296 |
Total assets | 271,082 | 250,138 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 67,845 | 68,160 |
Deferred revenue and student deposits | 59,554 | 55,284 |
Total current liabilities | 127,399 | 123,444 |
Rent liability | 25,106 | 22,409 |
Other long-term liabilities | 4,323 | 5,347 |
Total liabilities | 156,828 | 151,200 |
Commitments and contingencies (see Note 15) | ||
Preferred stock, $0.01 par value: | ||
Preferred stock issued | 0 | 0 |
Common stock, $0.01 par value: | ||
Common stock issued | 667 | 660 |
Additional paid-in capital | 177,287 | 192,413 |
Retained earnings | 383,559 | 375,180 |
Treasury stock | (447,259) | (469,315) |
Total stockholders' equity | 114,254 | 98,938 |
Total liabilities and stockholders' equity | $ 271,082 | $ 250,138 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Parenthetical - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | |||
Less allowance for credit losses | $ 12,416 | $ 13,712 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized | 300,000,000 | ||
Common Stock, Shares, Issued | 66,349,000 | 65,695,000 | |
Common Stock, Shares, Outstanding | 32,162,000 | 30,327,000 | |
Treasury Stock, Shares | 35,368,000 | 34,187,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 102,166 | $ 104,251 | $ 303,978 | $ 321,510 |
Costs and expenses: | ||||
Instructional costs and services | 44,929 | 51,406 | 136,184 | 158,432 |
Admissions advisory and marketing | 41,620 | 40,838 | 122,155 | 134,720 |
General and administrative | 14,779 | 17,389 | 46,765 | 55,841 |
Restructuring and impairment expense | 184 | 2,467 | 3,431 | 7,890 |
Gain (Loss) on Disposition of Assets | 60,000 | |||
Total costs and expenses | 101,512 | 112,100 | 308,534 | 356,883 |
Operating income (loss) | 654 | (7,849) | (4,556) | (35,373) |
Other income (expense), net | 39 | 144 | (62) | 1,040 |
Income (loss) before income taxes | 693 | (7,705) | (4,618) | (34,333) |
Income tax expense (benefit) | (428) | (147) | (12,906) | (2,536) |
Net income (loss) | $ 1,121 | $ (7,558) | $ 8,288 | $ (31,797) |
Income (loss) per share: | ||||
Earnings Per Share, Basic (in dollars per share) | $ 0.03 | $ (0.25) | $ 0.26 | $ (1.09) |
Earnings Per Share, Diluted (in dollars per share) | $ 0.03 | $ (0.25) | $ 0.26 | $ (1.09) |
Weighted average number of common shares outstanding used in computing income (loss) per share: | ||||
Basic (in shares) | 32,646 | 30,263 | 31,711 | 29,230 |
Diluted (in shares) | 34,015 | 30,263 | 32,342 | 29,230 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Treasury Stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | $ 127,614 | $ 653 | $ 205,157 | $ 429,992 | $ (508,188) | ||
Balance (in shares) at Dec. 31, 2018 | 65,289 | ||||||
Balance at Dec. 31, 2018 | 127,614 | $ 653 | 205,157 | 429,992 | (508,188) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 121,983 | $ 656 | 206,165 | 423,350 | (508,188) | ||
Stock-based compensation | 1,706 | 1,706 | |||||
Exercise of stock options (in shares) | 6 | ||||||
Exercise of stock options | 60 | $ 1 | 59 | ||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 284 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (755) | $ 2 | (757) | ||||
Net income (loss) | (6,642) | (6,642) | |||||
Balance (in shares) at Mar. 31, 2019 | 65,579 | ||||||
Balance at Mar. 31, 2019 | 121,983 | $ 656 | 206,165 | 423,350 | (508,188) | ||
Balance (in shares) at Dec. 31, 2018 | 65,289 | ||||||
Balance at Dec. 31, 2018 | 127,614 | $ 653 | 205,157 | 429,992 | (508,188) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 118,256 | $ 659 | 188,717 | 398,195 | (469,315) | ||
Net income (loss) | (31,797) | ||||||
Balance (in shares) at Sep. 30, 2019 | 65,636 | ||||||
Balance at Sep. 30, 2019 | 118,256 | $ 659 | 188,717 | 398,195 | (469,315) | ||
Balance (in shares) at Dec. 31, 2018 | 65,289 | ||||||
Balance at Dec. 31, 2018 | 127,614 | $ 653 | 205,157 | 429,992 | (508,188) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 127,614 | $ 91 | $ 660 | 192,413 | 375,180 | $ 91 | (469,315) |
Balance (in shares) at Dec. 31, 2019 | 65,695 | ||||||
Balance at Dec. 31, 2019 | 98,938 | 91 | $ 660 | 192,413 | 375,180 | 91 | (469,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 121,983 | $ 656 | 206,165 | 423,350 | (508,188) | ||
Balance (in shares) at Mar. 31, 2019 | 65,579 | ||||||
Balance at Mar. 31, 2019 | 121,983 | $ 656 | 206,165 | 423,350 | (508,188) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 122,390 | $ 659 | 185,293 | 405,753 | (469,315) | ||
Stock-based compensation | 3,596 | 3,596 | |||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 20 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (51) | $ 0 | (51) | ||||
Stock issued under employee stock purchase plan (in shares) | 29 | ||||||
Stock issued under employee stock purchase plan | 96 | $ 0 | 96 | ||||
Stock issued for acquisition | 14,363 | $ 3 | (24,513) | 38,873 | |||
Net income (loss) | (17,597) | (17,597) | |||||
Balance (in shares) at Jun. 30, 2019 | 65,628 | ||||||
Balance at Jun. 30, 2019 | 122,390 | $ 659 | 185,293 | 405,753 | (469,315) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 122,390 | 659 | 185,293 | 405,753 | (469,315) | ||
Adoption of accounting standards | 118,256 | $ 659 | 188,717 | 398,195 | (469,315) | ||
Stock-based compensation | 3,428 | 3,428 | |||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 8 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (4) | $ 0 | (4) | ||||
Net income (loss) | (7,558) | (7,558) | |||||
Balance (in shares) at Sep. 30, 2019 | 65,636 | ||||||
Balance at Sep. 30, 2019 | 118,256 | $ 659 | 188,717 | 398,195 | (469,315) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 118,256 | 659 | 188,717 | 398,195 | (469,315) | ||
Adoption of accounting standards | 98,938 | 91 | $ 660 | 192,413 | 375,180 | 91 | (469,315) |
Balance (in shares) at Dec. 31, 2019 | 65,695 | ||||||
Balance at Dec. 31, 2019 | 98,938 | 91 | $ 660 | 192,413 | 375,180 | 91 | (469,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 104,985 | 91 | $ 663 | 196,346 | 377,291 | 91 | (469,315) |
Stock-based compensation | 4,138 | 4,138 | |||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 338 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (202) | $ 3 | (205) | ||||
Net income (loss) | 2,020 | 2,020 | |||||
Balance (in shares) at Mar. 31, 2020 | 66,033 | ||||||
Balance at Mar. 31, 2020 | 104,985 | $ 663 | 196,346 | 377,291 | (469,315) | ||
Balance (in shares) at Dec. 31, 2019 | 65,695 | ||||||
Balance at Dec. 31, 2019 | 98,938 | 91 | $ 660 | 192,413 | 375,180 | 91 | (469,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 98,938 | $ 91 | $ 667 | 177,287 | 383,559 | $ 91 | (447,259) |
Net income (loss) | 8,288 | ||||||
Balance (in shares) at Sep. 30, 2020 | 66,349 | ||||||
Balance at Sep. 30, 2020 | 114,254 | $ 667 | 177,287 | 383,559 | (447,259) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 104,985 | $ 663 | 196,346 | 377,291 | (469,315) | ||
Balance (in shares) at Mar. 31, 2020 | 66,033 | ||||||
Balance at Mar. 31, 2020 | 104,985 | $ 663 | 196,346 | 377,291 | (469,315) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 112,005 | $ 666 | 176,160 | 382,438 | (447,259) | ||
Stock-based compensation | 802 | 802 | |||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 236 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (180) | $ 2 | (182) | ||||
Fair value of equity | 1,245 | 1,245 | |||||
Stock issued under employee stock purchase plan (in shares) | 57 | ||||||
Stock issued under employee stock purchase plan | 112 | $ 1 | 111 | ||||
Stock issued for acquisition | 0 | $ 0 | (22,162) | 22,162 | |||
Repurchase of common stock | (106) | (106) | |||||
Net income (loss) | 5,147 | 5,147 | |||||
Balance (in shares) at Jun. 30, 2020 | 66,326 | ||||||
Balance at Jun. 30, 2020 | 112,005 | $ 666 | 176,160 | 382,438 | (447,259) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | 112,005 | 666 | 176,160 | 382,438 | (447,259) | ||
Adoption of accounting standards | 112,005 | $ 667 | 177,287 | 383,559 | (447,259) | ||
Stock-based compensation | 1,146 | 1,146 | |||||
Stock issued under stock incentive plan, net of shares held for taxes (in shares) | 23 | ||||||
Stock issued under stock incentive plan, net of shares held for taxes | (18) | $ 1 | (19) | ||||
Net income (loss) | 1,121 | 1,121 | |||||
Balance (in shares) at Sep. 30, 2020 | 66,349 | ||||||
Balance at Sep. 30, 2020 | 114,254 | $ 667 | 177,287 | 383,559 | (447,259) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standards | $ 114,254 | $ 667 | $ 177,287 | $ 383,559 | $ (447,259) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||||||||||
Net income (loss) | $ 1,121 | $ 2,020 | $ (7,558) | $ (6,642) | $ 8,288 | $ (31,797) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||
Provision for bad debts | 9,845 | 10,508 | ||||||||
Depreciation and amortization | 8,749 | 7,171 | ||||||||
Deferred income taxes | 6 | 67 | ||||||||
Stock-based compensation | 6,086 | 8,730 | ||||||||
Noncash lease expense | 8,546 | 14,287 | ||||||||
Net loss (gain) on marketable securities | 47 | (216) | ||||||||
Reassessment of lease charges | 0 | 558 | ||||||||
Loss (gain) on disposal or impairment of fixed assets | 38 | 0 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (14,513) | (13,517) | ||||||||
Prepaid expenses and other current assets | 219 | (306) | ||||||||
Other long-term assets | (821) | (336) | ||||||||
Accounts payable and accrued liabilities | (12) | (1,170) | ||||||||
Deferred revenue and student deposits | 4,269 | (11,923) | ||||||||
Operating lease liabilities | (8,173) | (17,377) | ||||||||
Other liabilities | (2,468) | (2,922) | ||||||||
Net cash provided by (used in) operating activities | 20,106 | (38,243) | ||||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (2,587) | (26,956) | ||||||||
Purchases of investments | (702) | (102) | ||||||||
Capitalized costs for intangible assets | (199) | (454) | ||||||||
Cash paid in acquisition, net of cash acquired | 0 | (19,286) | ||||||||
Sale of investments | 1,818 | 0 | ||||||||
Net cash used in investing activities | (1,670) | (46,798) | ||||||||
Cash flows from financing activities: | ||||||||||
Proceeds from exercise of stock options | 0 | 60 | ||||||||
Proceeds from the issuance of stock under employee stock purchase plan | 112 | 96 | ||||||||
Borrowings from long-term liabilities | 2,682 | 0 | ||||||||
Tax withholdings on issuance of stock awards | (400) | (810) | ||||||||
Repurchase of common stock | (106) | 0 | ||||||||
Net cash provided by (used in) financing activities | 2,288 | (654) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 20,724 | (85,695) | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 92,537 | 190,584 | 92,537 | 190,584 | $ 190,584 | |||||
Cash, cash equivalents and restricted cash at end of period | 113,261 | 104,889 | 113,261 | 104,889 | 92,537 | |||||
Reconciliation of cash, cash equivalents, and restricted cash: | ||||||||||
Cash and cash equivalents | $ 86,628 | $ 69,280 | $ 79,145 | |||||||
Restricted cash | 26,633 | 23,257 | 25,744 | |||||||
Total cash, cash equivalents and restricted cash | $ 113,261 | $ 92,537 | $ 104,889 | $ 190,584 | 113,261 | 104,889 | $ 190,584 | $ 113,261 | $ 92,537 | $ 104,889 |
Supplemental disclosure of non-cash transactions: | ||||||||||
Purchase of equipment included in accounts payable and accrued liabilities | 36 | 1,582 | ||||||||
Issuance of common stock for vested restricted stock units | 1,388 | 2,650 | ||||||||
Consideration for acquisition in accounts payable and accrued liabilities | 0 | 483 | ||||||||
Issuance of common stock for acquisitions | $ 0 | $ 14,363 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Zovio Inc (the “Company”), a Delaware corporation, is an education technology services company that partners with higher education institutions and employers to deliver innovative, personalized solutions to help learners and leaders achieve their aspirations. One of its wholly owned subsidiaries, Ashford University ® (“Ashford”), is a regionally accredited academic institution, which delivers programs online. Ashford offers associate’s, bachelor’s, master’s and doctoral programs. In April 2019, the Company acquired Fullstack Academy, Inc (“Fullstack”) and TutorMe.com, Inc. (“TutorMe”), both of which became wholly-owned subsidiaries of the Company. The operating results of Fullstack and TutorMe subsequent to the acquisition dates have been included in the Company's condensed consolidated results of operations. For further information regarding these acquisitions, refer to Note 3, “Business Combinations” to the condensed consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. Unaudited Interim Financial Information The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete annual financial statements and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission (“SEC”) on February 20, 2020. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary to present a fair statement of the Company’s condensed consolidated financial position, results of operations and cash flows as of and for the periods presented. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by GAAP for complete annual consolidated financial statements. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements. Actual results could differ from those estimates. Comprehensive Income (Loss) The Company has no components of other comprehensive income (loss), and therefore, comprehensive income (loss) equals net income (loss). Accounts Receivable and Allowance for Credit Losses Accounts receivable represent the Company’s unconditional right to consideration arising from the transfer of tuition, digital materials, and technology and other fees under contracts with customers. Students generally fund their education costs through grants and/or loans under various Title IV programs, tuition assistance from military and corporate employers, and/or personal funds. With the exception of students enrolled under the Full Tuition Grant (“FTG”) program, payments are due on the respective course start date and are generally considered delinquent 120 days after that date. Accounts receivable are initially recorded at the amount management expects to collect under each customer contract and are adjusted for an allowance for credit losses at each reporting period. The Company determines its allowance for credit losses using a loss-rate method combined with an aging schedule approach, which is appropriate given the short-term nature of a substantial majority of the Company’s receivables and as collections vary significantly based upon a receivable’s aging bucket. Also, historical loss information is a reasonable basis on which to determine current expected credit losses for accounts receivable held at the reporting date because the risk characteristics of the Company’s customers and its credit practices have not changed significantly over time. The Company calculates separate historical loss rates for receivables under the FTG program and receivables from all other customers, on the basis of the different risk profiles and historical loss-rate experience with each type of customer. Additionally, the Company continuously monitors macroeconomic activity as well as other current conditions (e.g., internal Title IV processing times, economic downturns, cohort default rates, etc.) and their potential impact on collections to ensure the historical experience remains in line with current conditions and future short-term expectations. The allowance for credit losses is recorded within instructional costs and services in the consolidated statements of income (loss). The Company writes off accounts receivable when the student account is deemed uncollectible, which typically occurs when the Company has exhausted all collection efforts. Goodwill and Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events and circumstances warrant. Historically, this testing has been performed as of October 1 of each fiscal year, however the Company determined that the testing date should be moved up to August 31 of each fiscal year. The Company does not consider this change to be material. The Company believes the timing of assessment is preferable as it better aligns with the Company’s planning and forecasting process and also provides additional time to complete the annual assessment in advance of quarterly reporting deadlines. The change in assessment date did not delay, accelerate, or cause avoidance of a potential impairment charge. The Company has three distinct reporting units including (i) Zovio (which includes Ashford), (ii) Fullstack and (iii) TutorMe. To evaluate the impairment of goodwill, the Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. To evaluate the impairment of the indefinite-lived intangible assets, the Company assesses the fair value of the assets to determine whether they are greater or less than the carrying values. Determining the fair value of indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain and may include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company's assessment through the third quarter of 2020 has not resulted in any impairment of its goodwill or indefinite-lived intangibles. Notes Payable The fair value of the Company’s outstanding notes payable is estimated using the net present value of the payments, discounted at an interest rate that is consistent with market interest rates. The Company entered into a contract whereby its counterparty advanced funds to the Company for certain program development costs, which the Company is obligated to repay out of future revenues from the developed program. The Company recognized these advances as a debt obligation, and expects to begin repayments from future program revenues in 2024, five years from the contract start date. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The new standard is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The new standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. ASU 2016-03 is effective for SEC filers for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company applied the new standard, including all applicable updates, effective January 1, 2020, using a loss-rate method combined with an aging schedule approach. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) . This ASU modifies the disclosure requirements on fair value measurements in Topic 820 and removed, updated and added certain disclosure requirements. Some of these changes include, removing the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy, clarification of measurement uncertainty disclosure, and changes in realized gains and losses for the period included in other comprehensive income for recurring level 3 fair value measurements held as of the end of the reporting period, among others. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. The adoption of ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements. |
Business Combinations (Notes)
Business Combinations (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination | Business Combinations Proposed Asset Purchase and Sale Transaction On August 1, 2020, after receiving Board approval, the Company and Ashford entered into a definitive Asset Purchase and Sale Agreement (the “Purchase Agreement”), by and among the Company, Ashford, the Arizona Board of Regents, a body corporate for and on behalf of the University of Arizona (the “University of Arizona”), and the University of Arizona Global Campus, a newly formed Arizona nonprofit corporation (“University of Arizona Global Campus”). Pursuant to the Purchase Agreement, at the closing of the sale, the Company and Ashford have agreed to transfer to University of Arizona Global Campus the tangible and intangible academic and related operations and assets comprising the University to University of Arizona Global Campus for consideration of $1.00 and University of Arizona Global Campus’s agreement to assume certain related liabilities. The transferred assets will include the University’s academic curriculum and content, subject to a license of that content back to the Company for use in its continuing business. The transferred assets would also include $16.5 million in cash working capital and an additional cash payment to University of Arizona Global Campus of $37.5 million that the Company will make at closing. In addition, at the closing of the Sale, the University’s faculty, academic leadership and related staff will transfer their employment from Ashford to University of Arizona Global Campus. The pending regulatory approvals, notably with its accreditor, and political uncertainty have led the Company to conclude that the proposed Ashford sale did not meet the held for sale criteria as of September 30, 2020. Given the anticipated sales price of $1.00, the Company is projecting a total loss on transaction of approximately $60 million at closing, which is comprised of approximately $55 million of anticipated net assets loss, as well as approximately $5 million of additional costs to sell. Acquisition of Fullstack Academy, Inc. On April 1, 2019, the Company acquired Fullstack, a coding academy headquartered in New York, by acquiring all of its outstanding shares, pursuant to an Agreement and Plan of Reorganization (the “Fullstack Merger Agreement”). As of March 31, 2019, Fullstack had a carrying value of approximately $7.1 million of assets, excluding goodwill. At the closing of the Fullstack acquisition, the equityholders of Fullstack received consideration consisting of $17.7 million in cash (less purchase price adjustments of $1.8 million, plus third-party expenses of $2.0 million), and an aggregate of 2,443,260 shares of the Company’s common stock, subject to escrow adjustments. Additionally, under the Fullstack Merger Agreement, the equityholders of Fullstack will be entitled to receive up to 2,250,000 contingent shares of the Company’s common stock (the “Fullstack Contingent Consideration”). The Fullstack Merger Agreement contains an employee incentive retention pool of up to $5.0 million in cash, payable at specified times over a two The assets and liabilities of Fullstack were recorded on the Company’s condensed consolidated balance sheets at their estimated fair values as of April 1, 2019, the acquisition date. Fullstack’s results of operations are included in the Company’s condensed consolidated statements of income (loss) from that date. Fullstack recognized revenue of $9.2 million, an operating loss of $10.6 million, and a net loss of $10.6 million for the period from acquisition through December 31, 2019. See additional supplemental pro forma financial information below. For the twelve months ended December 31, 2019, the Company recorded Fullstack acquisition-related expenses of $4.7 million, in the general and administrative expense line item on the consolidated statements of income (loss). The Company accounts for business combinations using the acquisition method of accounting. The following table summarizes the purchase price, as well as the final allocation of the purchase price relating to the assets and liabilities purchased (in thousands): Cash consideration for acquired assets $ 17,743 Fair value of equity 12,336 Fair value of contingent consideration payable 3,250 Total purchase price $ 33,329 Purchase Price Allocation: Cash and cash equivalents $ 585 Accounts receivable 5,604 Prepaid and other assets 665 Property and equipment 167 Operating lease assets 1,297 Intangible assets 11,605 Other long-term assets 20 Accounts payable and accrued liabilities (496) Deferred revenue (2,350) Long-term liabilities (1,297) Total identifiable net assets acquired $ 15,800 Deferred tax liability (2,166) Goodwill 19,695 Total purchase consideration $ 33,329 The fair values assigned to assets acquired and liabilities assumed for Fullstack were based on management's best estimates and assumptions as of the reporting date. The fair value of the consideration to be paid exceeded the fair value of the net assets acquired and liabilities assumed, resulting in goodwill being recorded. Goodwill arising from the acquisition consists largely of future performance expected to be generated from new university and student relationships. None of the goodwill recognized is expected to be deductible for income tax purposes. The acquired intangible assets primarily relate to developed curriculum and trademarks, as well as university and student relationships, and have useful lives that range from 2 to 10 years. The fair value of the common shares issued as part of the consideration paid was determined on the basis of the closing market price of the Company’s shares on the acquisition date, and also incorporated a discount for lack of marketability rates for various holding periods. The Fullstack Contingent Consideration are issuable, subject to the terms and conditions of the Fullstack Merger Agreement. Of the total contingent 2,250,000 shares, (i) 1,250,000 were based upon final determination of the achievement of certain employee retention requirements and was expensed over the retention period, (ii) 500,000 shares are based upon 2020 revenue performance, earned on a sliding scale, in the event that revenues for Fullstack are between $25.0 million and $35.0 million, and (iii) 500,000 shares are based on contract performance milestones in 2019 and 2020, earned on a sliding scale, in the event Fullstack obtains between 4 and 8 new university contracts. The retention-based shares were achieved and paid out as of April 1, 2020. The fair value of the remaining performance-based Fullstack Contingent Consideration arrangements was estimated by applying a Monte Carlo simulation, based on the result of forecast information. These measures are based on significant inputs that are not observable by the market, and are therefore deemed to be Level 3 inputs. At each subsequent reporting date, the Company will remeasure the contingent consideration and recognize any changes in value, if necessary. If the probability of achieving the performance target significantly changes from what was initially anticipated, the change could have a significant impact on the Company’s financial statements in the period recognized. Fullstack had previously obtained 8 new university contracts and as such, the valuation of the related 500,000 shares related to contract performance milestones was previously reclassified to equity. For further information regarding fair valuation, refer to Note 6, “Fair Value Measurements” to the condensed consolidated financial statements. Acquisition of TutorMe.com, Inc. On April 3, 2019, the Company acquired TutorMe, a provider of on-demand tutoring and online courses, headquartered in California, by acquiring all of its outstanding shares, pursuant to an Agreement and Plan of Reorganization (the “TutorMe Merger Agreement”). As of March 31, 2019, TutorMe had a carrying value of $0.6 million of assets, excluding goodwill. At the closing of the TutorMe acquisition, in exchange for all outstanding shares of TutorMe capital stock and other rights to acquire or receive capital stock of TutorMe, the Company (i) paid a total of $3.0 million in cash, subject to certain purchase price adjustments, (ii) issued a total of 309,852 shares of the Company’s common stock, and (iii) assumed all issued and outstanding options of TutorMe (the “Assumed Options”), of which a total of 231,406 shares of the Company’s common stock are underlying the Assumed Options that are subject to certain time-based vesting requirements and a total of 79,199 shares of the Company’s common stock are underlying the Assumed Options that are subject to certain performance-based vesting requirements. Separately, the Company (x) paid a total of approximately $1.2 million in cash to certain service providers of TutorMe as a transaction bonus and (y) issued a total of 293,621 Performance Stock Units (“PSUs”) to certain continuing service providers of TutorMe pursuant to the Company’s 2009 Stock Incentive Plan (as amended) and a restricted stock unit agreement. The assets and liabilities of TutorMe were recorded on the Company’s condensed consolidated balance sheets at their estimated fair values as of April 3, 2019, the acquisition date. TutorMe’s results of operations are included in the Company’s condensed consolidated statements of income (loss) from that date. TutorMe recognized revenue of $0.9 million, an operating loss of $3.2 million, and a net loss of $3.2 million for the period from acquisition through December 31, 2019. See additional supplemental pro forma financial information below. For the twelve months ended December 31, 2019, the Company recorded TutorMe acquisition-related expenses of $1.9 million, in the general and administrative expense line item on the consolidated statements of income (loss). The Company accounts for business combinations using the acquisition method of accounting. The following table summarizes the purchase price, as well as the final allocation of the purchase price relating to the assets and liabilities purchased (in thousands): Cash consideration for acquired assets $ 3,028 Fair value of equity 2,026 Total purchase price $ 5,054 Purchase Price Allocation: Cash and cash equivalents $ 214 Accounts receivable 46 Intangible assets 1,730 Accounts payable and accrued liabilities (35) Deferred revenue (200) Long-term liabilities (3) Total identifiable net assets acquired $ 1,752 Deferred tax liability (260) Goodwill 3,562 Total purchase consideration $ 5,054 The fair value assigned to assets acquired and liabilities assumed for TutorMe are based on management's best estimates and assumptions as of the reporting date. The fair value of the consideration to be paid exceeded the fair value of the net assets acquired and liabilities assumed, resulting in goodwill being recorded. Goodwill arising from the acquisition consists largely of future performance expected to be generated from new university and student relationships, as well as the developed technology. None of the goodwill recognized is expected to be deductible for income tax purposes. The acquired intangible assets primarily relate to developed technology, as well as university and student relationships, and have useful lives that range from 2 to 10 years. The fair value of equity includes the common shares issued as part of the consideration paid was determined on the basis of the closing market price of the Company’s shares on the acquisition date, which also incorporated a discount for lack of marketability rates for various holding periods. Supplemental Pro Forma Information (Unaudited) The following table presents unaudited pro forma financial information, as if all acquisitions had been included in the company’s results as of January 1, 2018 (in thousands, except per share amounts): Year Ended December 31, 2019 2018 Revenue $ 421,390 $ 457,208 Net income (loss) $ (56,661) $ 4,311 Basic income (loss) per share $ (1.92) $ 0.16 Diluted income (loss) per share $ (1.92) $ 0.16 The unaudited supplemental pro forma financial data has been calculated after applying our accounting policies and adjusting the historical results of Fullstack and TutorMe with pro forma adjustments, net of tax, that assume the acquisition occurred on January 1, 2018. The unaudited supplemental pro forma financial data does not reflect the potential realization of revenue synergies or cost savings, nor does it reflect other costs relating to the integration of the acquired companies. This pro forma financial information should not be considered indicative of the results that would have actually occurred if the acquisition had been consummated on January 1, 2018, nor are they indicative of future results. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised goods or services are transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. Determining whether a valid customer contract exists includes an assessment of whether amounts due under the contract are collectible. The Company performs this assessment at the beginning of every contract and subsequently thereafter if new information indicates there has been a significant change in facts and circumstances. The Company’s contracts with customers generally include multiple performance obligations, which it identifies by assessing whether each good and service promised in the contract is distinct. For each performance obligation, the Company allocates the transaction price, including fixed and variable consideration, on the basis of the relative standalone selling prices of each good and service in the contract, which is determined using observable prices. The following table presents the Company’s net revenue disaggregated based on the revenue source (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Tuition revenue, net $ 93,183 $ 95,043 $ 277,533 $ 291,729 Digital materials revenue, net 5,809 5,890 17,415 18,947 Technology fee revenue, net 2,628 2,856 7,628 9,381 Other revenue, net (1) 546 462 1,402 1,453 Total revenue, net $ 102,166 $ 104,251 $ 303,978 $ 321,510 (1) Primarily consists of revenues generated from services such as graduation fees, transcript fees, and other miscellaneous services. The following table presents the Company’s net revenue disaggregated based on the timing of revenue recognition (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Over time, over period of instruction $ 82,659 $ 85,110 $ 244,872 $ 264,555 Over time, full tuition grant (1) 13,948 13,599 42,792 38,908 Point in time (2) 5,559 5,542 16,314 18,047 Total revenue, net $ 102,166 $ 104,251 $ 303,978 $ 321,510 (1) Represents revenue generated from the FTG program. (2) Represents revenue generated from digital textbooks and other miscellaneous fees. The Company operates under one reportable segment and generates the majority of its revenue from tuition, technology fees, and digital materials related to students whose primary funding source is governmental funding. Tuition represents amounts charged for course instruction, and technology fees represent amounts charged for the students’ use of the technology platform on which course instruction is delivered. Digital materials fees represent amounts charged for digital textbooks that accompany the majority of courses taught at Ashford. With the exception of students attending courses within the three-week conditional admission, the majority of tuition and technology fees are recognized as revenue as control of the services is transferred to the student, which occurs over the applicable period of instruction. Similarly, the majority of digital materials fees are recognized as revenue when control of the product has been transferred to the student, which occurs when the student is granted unrestricted access to the digital textbook, generally, on the first day of the course. Revenue generated from students within the conditional admission period is deferred and recognized when the student matriculates into Ashford, which occurs in the fourth week of the course. Ashford’s online students generally enroll in a program that encompasses a series of five to six-week courses that are taken consecutively over the length of the program. With the exception of those students under conditional admission and students enrolled under the FTG program, online students are billed on a payment period basis on the first day of a course. Students under conditional admission are billed for the payment period upon matriculation. If a student's attendance in a class precedes the receipt of cash from the student's source of funding, the Company establishes an account receivable and corresponding deferred revenue in the amount of the tuition due for that payment period. Cash received either directly from the student or from the student's source of funding reduces the balance of accounts receivable due from the student. Financial aid from sources such as the federal government's Title IV programs pertains to the online student's award year and is generally divided into two disbursement periods. As such, each disbursement period may contain funding for up to four courses. Financial aid disbursements are typically received during the online student's attendance in the first or second course. Since the majority of disbursements cover more courses than for which a student is currently enrolled, the amount received in excess effectively represents a prepayment from the online student for up to four courses. At the end of each accounting period, the deferred revenue and related account receivable balances are reduced to present amounts attributable to the current course. In certain cases, Ashford provides scholarships to students who qualify under various programs. These scholarships are recognized as direct reductions of revenue consistent with the timing of recognition associated with the related performance obligations. Also, for some customers, the Company does not expect to collect 100% of the consideration to which we are contractually entitled and, as a result, those customers may receive discounts or price adjustments that, based on historical Company practice, represent implied price concessions and are accounted for as variable consideration. The majority of these price concessions relate to amounts charged to students for goods and services, which management has determined will not be covered by the student’s primary funding source (generally, government aid) and, as a result, the student will become directly financially responsible for them. The reduction in the transaction price that results from this estimate of variable consideration reflects the amount the Company does not expect to be entitled to in exchange for the goods and services it will transfer to the students, as determined using historical experience and current factors, and includes performing a constraint analysis. These estimates of variable consideration are recorded as direct reductions of revenue consistent with the timing of recognition associated with the related performance obligation. A portion of tuition revenue, technology fee revenue, and digital materials revenue is generated from contracts with students enrolled under the FTG program, which is a 12-month grant that, when combined with a corporate partner’s annual tuition assistance program, enables eligible students to earn their degree without incurring student loan debt. Students enrolled under this program are eligible to take up to ten undergraduate or eight graduate courses per 12-month grant period and must first utilize 100% of the funds awarded under their employer’s annual tuition assistance program before they can be awarded the FTG grant. The grants awarded by Ashford under the FTG program are considered a material right, and, as such, the Company records a contract liability for a portion of the consideration received or due under these contracts. The contract liability is recorded in deferred revenue and student deposits on the Company’s condensed consolidated balance sheets, and further discussed in the deferred revenue section below. The standalone selling price of the material right is determined based on the observable standalone selling price of the courses. The transaction price in each FTG contract is allocated to this material right on a relative standalone selling price basis. The contract liability is recognized as revenue at the earlier of satisfaction of the future obligation, the student drops from the university, or its expiration. Billing of products and services transferred under an FTG student contract generally occurs after the conclusion of a course. There are no material differences between the timing of the products and services transferred and the payment terms. Deferred Revenue Deferred revenue consists of cash payments that are received or due in advance of the Company’s performance as well as deferrals associated with certain contracts that include a material right. Below are the opening and closing balances of deferred revenue from the Company’s contracts with customers (in thousands): 2020 2019 Deferred revenue opening balance, January 1 $ 23,356 $ 21,768 Deferred revenue closing balance, September 30 29,413 22,549 Increase $ 6,057 $ 781 For further information on deferred revenue and student deposits, refer to Note 8, “Other Significant Balance Sheet Accounts - Deferred Revenue and Student Deposits” and for further information on receivables, refer to Note 7, “Accounts Receivable, Net” within the condensed consolidated financial statements. For the majority of the Company’s customers, payment for products and services is due at the beginning of each course. Under special circumstances, some customers may be offered non-interest bearing payment plan arrangements that can extend for up to three years. These payment plan arrangements give rise to significant financing components. However, since the Company historically collects substantially all of the consideration to which it expects to be entitled under such payment plans within one year or less, the impact of these significant financing components is not material to any period presented. The difference between the opening and closing balances of deferred revenue primarily results from the timing difference between the Company’s performance and the customer’s payment. For the nine months ended September 30, 2020, the Company recognized $23.3 million of revenue that was included in the deferred revenue balance as of January 1, 2020. For the nine months ended September 30, 2019, the Company recognized $21.8 million of revenue that was included in the deferred revenue balance as of January 1, 2019. Amounts reported in the closing balance of deferred revenue are expected to be recognized as revenue within the next 12 months. |
Restructuring and Impairment Ex
Restructuring and Impairment Expense | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment, and Other Activities Disclosure | Restructuring and Impairment Expense During the three months ended September 30, 2020 and 2019, the Company recognized $0.2 million and $2.5 million, respectively, of restructuring and impairment expense. During the nine months ended September 30, 2020 and 2019, the Company recognized $3.4 million and $7.9 million, respectively, of restructuring and impairment expense. These expenses were comprised of the components described below. The Company had previously relocated its headquarters from San Diego, California to Chandler, Arizona. In addition, the Company had previously vacated or consolidated properties in San Diego and Denver, and subsequently reassessed its obligations on non-cancelable leases. As a result of the relocation and lease reassessments, during the three months ended September 30, 2020 and 2019, the Company recognized expense of $0.3 million and $1.3 million, respectively, and during the nine months ended September 30, 2020 and 2019, the Company recognized $0.5 million and $1.8 million, respectively. The Company had previously reassessed its resources through reorganization. For the three months ended September 30, 2020 and 2019, the Company recognized a credit of $0.1 million and an expense of $1.2 million, respectfully, of restructuring and impairment expense relating to severance costs for wages and benefits. For the nine months ended September 30, 2020 and 2019, the Company recognized $2.9 million and $6.2 million, respectively. For the three and nine months ended September 30, 2019, the Company recognized a credit of $32 thousand and $0.2 million, respectively, as a reversal to restructuring and impairment charges, relating to the closure of a component of the Company's business. No such credit or expense was recorded for the three and nine months ended September 30, 2020. The following table summarizes the amounts recorded in the restructuring and impairment expense line item on the Company’s condensed consolidated statements of income (loss) for each of the periods presented (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Student transfer agreement costs (credit) $ — $ (32) $ — $ (171) Severance costs (70) 1,220 2,902 6,231 Lease exit and other costs 254 1,279 529 1,830 Total restructuring and impairment expense $ 184 $ 2,467 $ 3,431 $ 7,890 The following table summarizes the changes in the Company's restructuring and impairment liability by type during the nine months ended September 30, 2020 (in thousands): Student Transfer Agreement Costs Severance Costs Lease Exit and Other Costs Total Balance at December 31, 2019 $ 1,296 $ 8,001 $ 976 $ 10,273 Restructuring and impairment expense — 2,902 529 3,431 Payments and adjustments (14) (10,067) (621) (10,702) Balance at September 30, 2020 $ 1,282 $ 836 $ 884 $ 3,002 The restructuring liability amounts are recorded within either the (i) accounts payable and accrued liabilities account, (ii) lease liability account or (iii) other long-term liabilities account on the condensed consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize the fair value information as of September 30, 2020 and December 31, 2019, respectively (in thousands): As of September 30, 2020 Level 1 Level 2 Level 3 Total Mutual funds $ 1,339 $ — $ — $ 1,339 As of December 31, 2019 Level 1 Level 2 Level 3 Total Mutual funds $ 2,502 $ — $ — $ 2,502 Contingent consideration $ — $ — $ 3,150 $ 3,150 The mutual funds in the tables above, represent the deferred compensation asset balances, which are considered to be trading securities. The Company’s deferred compensation asset balances are recorded in the investments line item on the Company’s condensed consolidated balance sheets, and are classified as Level 1 securities. There were no transfers between any level categories for investments during the periods presented. There were no differences between amortized cost and fair value of investments as of September 30, 2020 or December 31, 2019, and no reclassifications out of accumulated other comprehensive income during either the nine months ended September 30, 2020 or 2019. The contingent consideration represents the fair value of shares to be issued as part of the Fullstack acquisition. As of December 31, 2019, the contingent consideration is classified as Level 3 and was determined by use of a Monte Carlo simulation, which models 100,000 scenarios of the future revenue and university contracts over the measurement period, which |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net, consisted of the following (in thousands): As of As of Accounts receivable $ 52,125 $ 48,663 Less allowance for credit losses 12,416 13,712 Accounts receivable, net $ 39,709 $ 34,951 The following table presents the changes in the allowance for credit losses for the nine months ended September 30, 2020 (in thousands): Beginning Balance Charged to Expense Write-offs Recoveries of amounts Ending Balance FTG-related allowance $ 1,749 $ 1,524 $ (1,872) $ 337 $ 1,738 Non-FTG related allowance 11,963 8,321 (14,124) 4,518 10,678 Total allowance for credit losses $ 13,712 $ 9,845 $ (15,996) $ 4,855 $ 12,416 The following table presents the changes in the allowance for credit losses for the nine months ended September 30, 2019 (in thousands): Beginning Balance Charged to Expense Write-offs Recoveries of amounts Ending Balance FTG-related allowance $ 1,505 $ 1,395 $ (1,797) $ 377 $ 1,480 Non-FTG related allowance 10,675 9,113 (15,928) 4,820 8,680 Total allowance for credit losses $ 12,180 $ 10,508 $ (17,725) $ 5,197 $ 10,160 |
Other Significant Balance Sheet
Other Significant Balance Sheet Accounts | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Other Significant Balance Sheet Accounts | Other Significant Balance Sheet Accounts Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): As of As of Prepaid expenses $ 4,490 $ 4,593 Prepaid licenses 3,546 2,794 Prepaid income taxes 48 18 Income tax receivable (1) 8,582 1,695 Prepaid insurance 1,967 995 Insurance recoverable 382 670 Other current assets 1,130 9,759 Total prepaid expenses and other current assets $ 20,145 $ 20,524 (1) For the nine months ended September 30, 2020, the increase in income tax receivable was primarily attributable to the changes in tax law as a result of the CARES Act. For further information regarding the CARES Act, refer to Note 13, “Income Taxes” to the condensed consolidated financial statements. Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): As of As of Furniture and office equipment $ 36,206 $ 43,579 Software 7,419 7,381 Leasehold improvements 16,551 19,973 Vehicles 22 22 Total property and equipment 60,198 70,955 Less accumulated depreciation and amortization (28,767) (36,661) Total property and equipment, net $ 31,431 $ 34,294 For the three months ended September 30, 2020 and 2019, depreciation and amortization expense related to property and equipment was $1.5 million and $1.6 million, respectively. For the nine months ended September 30, 2020 and 2019, depreciation and amortization expense related to property and equipment was $4.7 million and $3.9 million, respectively. Goodwill and Intangibles, Net Goodwill and intangibles, net, consisted of the following (in thousands): September 30, 2020 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,787 $ (12,581) $ 1,206 Purchased intangible assets 29,185 (14,372) 14,813 Total definite-lived intangible assets $ 42,972 $ (26,953) $ 16,019 Goodwill and indefinite-lived intangibles 24,578 Total goodwill and intangibles, net $ 40,597 December 31, 2019 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 21,273 $ (19,667) $ 1,606 Purchased intangible assets 29,185 (10,950) 18,235 Total definite-lived intangible assets $ 50,458 $ (30,617) $ 19,841 Goodwill and indefinite-lived intangibles 24,578 Total goodwill and intangibles, net $ 44,419 For the three months ended September 30, 2020 and 2019, amortization expense was $1.3 million and $1.3 million, respectively. For the nine months ended September 30, 2020 and 2019, amortization expense was $4.0 million and $3.3 million, respectively. The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands): Year Ended December 31, Remainder of 2020 $ 1,324 2021 4,192 2022 3,567 2023 3,394 2024 1,864 2025 and thereafter 1,678 Total future amortization expense $ 16,019 Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following (in thousands): As of As of Accounts payable $ 12,575 $ 6,603 Accrued salaries and wages 8,260 11,872 Accrued bonus 9,619 6,560 Accrued vacation 4,699 5,123 Accrued litigation and fees 8,041 8,041 Accrued expenses 15,278 20,140 Current leases payable 7,774 7,875 Accrued insurance liability 1,599 1,946 Total accounts payable and accrued liabilities $ 67,845 $ 68,160 Deferred Revenue and Student Deposits Deferred revenue and student deposits consisted of the following (in thousands): As of As of Deferred revenue $ 29,413 $ 23,356 Student deposits 30,141 31,928 Total deferred revenue and student deposits $ 59,554 $ 55,284 Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): As of As of Uncertain tax positions $ 28 $ 102 Notes payable 2,763 — Contingent consideration — 3,150 Other long-term liabilities 1,532 2,095 Total other long-term liabilities $ 4,323 $ 5,347 |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities The Company has issued letters of credit that are collateralized with cash (held in restricted cash) in the aggregate amount of $17.9 million as of September 30, 2020. As part of its normal business operations, the Company is required to provide surety bonds in certain states in which the Company does business. The Company has entered into a surety bond facility with an insurance company to provide such bonds when required. As of September 30, 2020, the surety had issued $8.6 million in bonds on the Company’s behalf under this facility. |
Lease Obligations
Lease Obligations | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease Obligations | Lease Obligations Operating Leases The Company leases various office facilities with terms that expire at various dates through 2023. These facilities are used for academic operations, corporate functions, enrollment services and student support services. The Company does not have any leases other than its office facilities. All of the leases were classified as operating leases for the period ended September 30, 2020, and the Company does not have any finance leases. All of the leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on the Company’s condensed consolidated balance sheets. The Company has agreements to sublease certain portions of its office facilities, with two active subleases as of September 30, 2020. The Company’s subleases do not include any options to extend or for early termination and do not contain any residual value guarantees or restrictive covenants. All of the subleases were classified as operating leases for the period ended September 30, 2020. The Company is subleasing approximately 37,000 square feet of office space in Denver, Colorado with a remaining commitment to lease of 11 months and net lease payments of $0.9 million. The Company is subleasing additional office space of approximately 21,000 square feet in Denver, Colorado with a remaining commitment to lease of 29 months and net lease payments of $1.4 million. Sublease income for the nine months ended September 30, 2020 and 2019 was $1.4 million and $2.2 million, respectively. |
Income Per Share
Income Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Income Per Share | Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding for the period. Diluted income (loss) per share is calculated by dividing net income (loss) available to common stockholders for the period by the sum of (i) the weighted average number of common shares outstanding for the period, plus (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive securities for the periods presented include stock options, unvested restricted stock units (“RSUs”) and unvested performance stock units (“PSUs”). The following table sets forth the computation of basic and diluted income (loss) per share for the periods indicated (in thousands, except per share data): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Numerator: Net income (loss) $ 1,121 $ (7,558) $ 8,288 $ (31,797) Denominator: Weighted average number of common shares outstanding 32,646 30,263 31,711 29,230 Effect of dilutive options and stock units 1,369 — 631 — Diluted weighted average number of common shares outstanding 34,015 30,263 32,342 29,230 Income (loss) per share: Basic $ 0.03 $ (0.25) $ 0.26 $ (1.09) Diluted $ 0.03 $ (0.25) $ 0.26 $ (1.09) The following table sets forth the number of stock options and stock units excluded from the computation of diluted income (loss) per share for the periods indicated below because their effect was anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Stock options 1,525 2,141 1,654 1,983 Stock units — 3,228 577 1,461 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recorded $1.1 million and $3.4 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively, and $6.1 million and $8.7 million for the nine months ended September 30, 2020 and 2019, respectively. The related income tax benefit was $0.3 million and $0.8 million for the three months ended September 30, 2020 and 2019, respectively, and $1.5 million and $2.1 million for the nine months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2020, the Company granted 1.4 million RSUs at a weighted average grant date fair value of $2.22 and 0.8 million RSUs vested. During the nine months ended September 30, 2019, the Company granted 1.3 million RSUs at a grant date fair value of $5.68, and 0.4 million RSUs vested. During the nine months ended September 30, 2020, the Company granted 1.1 million performance-based or market-based PSUs at a weighted average grant date fair value of $2.18, and no performance-based or market-based PSUs vested. During the nine months ended September 30, 2019, 0.8 million market-based PSUs were granted at a grant date fair value of $6.97, and no performance-based or market-based PSUs vested. During the nine months ended September 30, 2020, no stock options were granted and no stock options were exercised. During the nine months ended September 30, 2019, the Company granted 0.2 million stock options at a grant date fair value of $4.28 and 6,274 stock options were exercised. As of September 30, 2020, unrecognized compensation cost was $6.5 million related to unvested stock options, RSUs and PSUs. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company uses the asset-liability method to account for taxes. Under this method, deferred income tax assets and liabilities result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the condensed consolidated financial statements that will result in income and deductions in future years. The Company recognizes deferred tax assets if realization of such assets is more-likely-than-not. In order to make this determination, the Company evaluates a number of factors including the ability to generate future taxable income from reversing taxable temporary differences, forecasts of financial and taxable income or loss, and the ability to carryback certain operating losses to refund taxes paid in prior years. The cumulative loss incurred over the three-year period ended September 30, 2020 constituted significant negative objective evidence against the Company’s ability to realize a benefit from its federal deferred tax assets. Such objective evidence limited the ability of the Company to consider in its evaluation certain subjective evidence such as the Company’s projections for future growth. On the basis of its evaluation, the Company determined that its deferred tax assets were not more-likely-than-not to be realized and that a valuation allowance against its deferred tax assets should continue to be maintained as of September 30, 2020. The Company’s current effective income tax rate that has been applied to normal, recurring operations for the nine months ended September 30, 2020 was (2.7)%. The Company’s actual effective income tax rate for the nine months ended September 30, 2020, after discrete items, was 279.5%. The income tax benefit for the nine months ended September 30, 2020 was attributable to certain changes in income tax law related to net operating loss carryback as a result of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The Company has filed for total refund claims of $12.7 million under the CARES Act and has received $6.2 million of the total refund claims as of September 30, 2020. As of December 31, 2019, the Company had federal and state net operating loss carryforwards of $42.0 million and $66.0 million, respectively, which are available to offset current year and future taxable income. The Company’s utilization of net operating loss carryforwards may be subject to an annual limitation due to ownership change provisions of Section 382 of the Internal Revenue Code of 1986, as amended. As of September 30, 2020, and December 31, 2019, the Company had $30 thousand and $2.1 million of gross unrecognized tax benefits, of which $10 thousand and $2.0 million would impact the effective income tax rate if recognized, respectively. Although the Company believes the tax accruals provided are reasonable, the final determination of tax returns under review or returns that may be reviewed in the future and any related litigation could result in tax liabilities that materially differ from the Company’s historical income tax provisions and accruals. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The tax years 2001 through 2019 are open to examination by major taxing jurisdictions to which the Company is subject. The IRS audit examinations of the Company’s income tax returns for the years 2013 through 2016 was completed during the quarter ended June 30, 2020 and the Company has received a letter dated July 7, 2020 from the Joint Committee on Taxation stating that it has taken no exception to the conclusions reached by the IRS. The final notice of proposed adjustments from the IRS examination had no adverse material impact on the Company’s overall financial results as of September 30, 2020. The Company’s income tax returns for the tax years ended December 31, 2013 through 2015 are under examination by the California Franchise Tax Board. |
Regulatory
Regulatory | 9 Months Ended |
Sep. 30, 2020 | |
Regulatory [Abstract] | |
Regulatory | Regulatory The Company is subject to extensive regulation by federal and state governmental agencies and accrediting bodies. In particular, the Higher Education Act of 1965, as amended (“Higher Education Act”), and the regulations promulgated thereunder by the U.S. Department of Education (“Department”) subject the Company to significant regulatory scrutiny on the basis of numerous standards that institutions of higher education must satisfy in order to participate in the various federal student financial aid programs under Title IV of the Higher Education Act (“Title IV programs”). Ashford is regionally accredited by Western Association of Schools and Colleges Senior College and University Commission (“WSCUC”). Department of Education Program Reviews of Ashford University In July 2016, Ashford was notified by the Department that an off-site program review had been scheduled to assess Ashford’s administration of the Title IV programs in which it participates. The off-site program review which commenced in July 2016 and covered students identified in the 2009-2012 calendar year data previously provided by Ashford to the Department in response to a request for information received from the Department’s Office of Federal Student Aid (“FSA”) back in December 2015. On September 29, 2020, Ashford received a letter from the Department noting that the reviews pertaining to the 2009-2012 calendar year were now closed out, with no further action required. In December 2016, the Department informed Ashford that it intended to continue the program review on-site at Ashford. The on-site program review commenced in January 2017 and initially covered the 2015-2016 and 2016-2017 award years, but may be expanded if the Department deems such expansion appropriate. To date, the Company has not received a draft report from the Department. Department of Education Program Participation Agreement for Ashford University On April 23, 2018, Ashford received an updated Program Participation Agreement from the Department. Based on the updated Program Participation Agreement, Ashford is provisionally certified to participate in Federal Student Financial Aid Programs until March 31, 2021. Ashford is required to submit its reapplication for continued certification by December 31, 2020 and will initiate the process at the appropriate date. Department of Education Close Out Audit of University of the Rockies The Company previously recorded an expense of $1.5 million for the year ended December 31, 2018, in relation to the close out audit of University of the Rockies resulting from its merger with Ashford in October 2018. The expense was recorded in relation to borrower defense to repayment regulations. On September 26, 2019, the Department of Education sent Ashford a Final Audit Determination letter for the University of the Rockies. This letter confirmed that with the exception of the borrower defense to repayment regulations, none of the other audit findings resulted in financial liability. The Department also stated that additional liabilities could accrue in the future. On December 19, 2019, the Company filed an administrative appeal with the Department appealing the alleged liability on the basis that the University of Rockies did not close but rather merged with Ashford. The briefing on the appeal is complete and the Company is awaiting a decision by the administrative law judge. WSCUC Accreditation of Ashford University In July 2013, WSCUC granted Initial Accreditation to Ashford for five years, until July 15, 2018. In December 2013, Ashford effected its transition to WSCUC accreditation and designated its San Diego, California facilities as its main campus and its Clinton, Iowa campus as an additional location. As part of its institutional review process, WSCUC commenced its comprehensive review of Ashford with an off-site review in March 2018. As part of the WSCUC Institutional Review Process a Reaffirmation of Accreditation Visit was conducted by an evaluation team in April 2019. At its meeting in June 2019, the Commission acted to reaffirm Ashford’s accreditation through Spring 2025. WSCUC also visited Ashford on May 1, 2019 to conduct its federally mandated, six-month post-implementation review, due to the merger of University of the Rockies and into Ashford which was finalized on October 31, 2018. WSCUC has verified that Ashford has met all post-implementation requirements related to the merger of the two entities. Ashford submitted a change of control and legal status application (the “Change of Control Application”) to convert to AU NFP, a nonprofit California public benefit corporation, and separate from the Company (the “Conversion Transaction”). On July 12, 2019, WSCUC notified Ashford that it had approved the Change of Control Application for the Conversion Transaction. The approval is subject to certain conditions which must be met prior to the close of the Conversion Transaction, including divestiture of financial and ownership interest in the Company by all Ashford officers and related parties and submission of a revised services agreement with respect to the Conversion Transaction, including the incorporation of key performance indicators into that agreement. WSCUC would also require a post-implementation site visit of Ashford within six months. In connection with the Purchase Agreement by and among the Company, Ashford and the University of Arizona, Ashford submitted to WSCUC, on July 1, 2020, a substantive change application for a change in ownership which requires review and approval by the Substantive Change Committee and the Structural Change Committee of the Commission. The name change from Ashford University to University of Arizona Global Campus will not occur until the change of ownership receives approval from WSCUC. The next WSCUC meeting in November 4-6, 2020, which is when this approval will first be considered. For further information regarding the Proposed Asset Purchase and Sale Transaction, refer to Note 3, “Business Combinations” to the condensed consolidated financial statements. Department of Education Abbreviated Preacquisition Review Letter On October 7, 2019, the Company announced that the Department has provided a response to the request for review made on July 15, 2019 in connection with the Conversion Transaction to AU NFP. The request for an abbreviated preacquisition review was made in accordance with Department procedures pursuant to which the Department provides information about conditions it intends to impose in connection with the continued participation in federal Title IV student financial aid programs by the applicant following a change in ownership. Separately, on October 7, 2020, the Company requested an abbreviated preacquisition review in connection with the proposed asset purchase and sale transaction with University of Arizona Global Campus. The Department is expected to conduct a post-closing review of Ashford following the change of control resulting from the proposed asset purchase and sale transaction consistent with the Department’s procedures during which the Department makes a determination on the institution’s request for recertification from the Department following the change of control, including whether to impose or place other conditions or restrictions on Ashford. Financial Responsibility The Department calculates an institution's composite score for financial responsibility based on its (i) equity ratio, which measures the institution's capital resources, ability to borrow and financial viability; (ii) primary reserve ratio, which measures the institution's ability to support current operations from expendable resources; and (iii) net income ratio, which measures the institution's ability to operate at a profit. An institution that does not meet the Department's minimum composite score of 1.5 may demonstrate its financial responsibility by posting a letter of credit in favor of the Department and possibly accepting other conditions on its participation in the Title IV programs. For the fiscal year ended December 31, 2018, the consolidated composite score calculated was 2.2, satisfying the composite score requirement of the Department's financial responsibility test, which institutions must satisfy to participate in Title IV programs. The Company expects the consolidated composite score for the year ended December 31, 2019 to be 0.7 and below the composite score requirement as a result of non-recurring restructuring and acquisition related charges. The Department has historically calculated Ashford’s composite score based on Zovio’s consolidated audited financial statements rather than Ashford’s stand alone audited financial statements. The deadline to submit audited financial statements was postponed by the Department from June 30, 2020 until December 31, 2020. If either the Sale Agreement to University of Arizona or the Conversion Transaction takes place, Ashford will no longer be owned by Zovio, and therefore Ashford or its new owner will submit its stand-alone audited financial statements to the Department for the purpose of calculating the institution’s composite score. The Company expects Ashford’s composite score, based on its standalone audited financial statements for the year ended December 31, 2019, to be at least 1.6 and above the Department’s requirement for a composite score of 1.5 or greater. If the Department calculates Ashford’s composite score based on Zovio’s consolidated financial statements, the institution’s composite score for the period ended December 31, 2019 would be below the required composite score of at least 1.5. In such event, to continue participation in Title IV programs, Ashford would either need to: (1) submit a letter of credit equal to at least 50% or more of the Title IV Program funds received by the institution during its most recently completed fiscal year; or (2) at the discretion of the Department, submit a letter of credit equal to at least 10% or more of the Title IV Program funds received by the institution during its most recently completed fiscal year and accept additional conditions (including, but not limited to, a provisional certification, compliance with monitoring requirements, remain current on debt payments, meet certain financial obligations, agree to receive Title IV Program funds under an arrangement other than the Department’s standard advance funding arrangement, and agree to pay Title IV credit balances due to students before submitting a request for funds to the Department). GI Bill Benefits On September 6, 2019, the U.S. Department of Veterans Affairs (“VA”) announced that effective October 1, 2019, the VA would be assuming the functions of the State Approving Agency (“SAA”) for California (“CSAAVE”), based on its negative assessment of CSAAVE’s performance during the preceding three years. On October 14, 2019, Ashford submitted the application for approval in California with the VA. On February 14, 2020, Ashford received notice from the VA, serving as the SAA for the State of California, that Ashford meets the criteria for approval for veterans education under the provisions of Title 38, United States Code, Section 3675, and that the VA, acting as the California SAA, had approved substantially all of Ashford’s programs that students and potential students could pursue using their GI Bill benefits, retroactive to July 1, 2019. This notice substantially resolved the GI Bill Benefits issue that emerged in May 2016, when the Iowa Department of Education (“Iowa DOE”), which is the Iowa SAA, informed the Company that, as a result of the planned closure of the Clinton Campus, the Iowa DOE would no longer continue to approve Ashford’s programs for GI Bill benefits after June 30, 2016, and recommended Ashford seek approval through the SAA for any location that met what the Iowa DOE determined to be the definition of a “main campus” or “branch campus.” On June 25, 2020, the California Department of Veterans Affairs signed an agreement with the US Department of Veterans Affairs that returned the CSAAVE to its role as the SAA for the State of California. CSAAVE’s transition back into their role as the SAA became effective on July 1, 2020. Defense to Repayment On October 28, 2016, the Department had published borrower defense to repayment regulations to change processes that assist students in gaining relief under certain provisions of the Direct Loan Program regulations. However, on February 14, 2018, the Department announced that it was postponing the effective date of the 2016 defense to repayment regulations until July 1, 2019, so that it could complete the negotiated rulemaking process and develop the new regulations. Because the negotiated rulemaking committee did not reach consensus, the Department published a proposed regulation through a notice of proposed rulemaking (“NPRM”), took public comment, and planned to issue final regulations by November 1, 2018, which were to be effective July 1, 2019. This did not occur. In the Fall of 2018, the U.S. District Court for the District of Columbia issued a series of orders and opinions holding these procedural delays by the Department to be improper. The Court reinstated the 2016 repayment regulations as of October 16, 2018. The 2016 defense to repayment regulations allow a borrower to assert a defense to repayment on the basis of a substantial misrepresentation, any other misrepresentation in cases where certain other factors are present, a breach of contract or a favorable nondefault contested judgment against a school for its act or omission relating to the making of the borrower’s loan or the provision of educational services for which the loan was provided. In addition, the financial responsibility standards contained in the new regulations establish the conditions or events that trigger the requirement for an institution to provide the Department with financial protection in the form of a letter of credit or other security against potential institutional liabilities. Triggering conditions or events include, among others, certain state, federal or accrediting agency actions or investigations, and in the case of publicly traded companies, receipt of certain warnings from the SEC or the applicable stock exchange, or the failure to timely file a required annual or quarterly report with the SEC. The new regulations also prohibit schools from requiring that students agree to settle future disputes through arbitration. On March 15, 2019, the Department issued guidance for the implementation of parts of the regulations. The guidance covers an institution's responsibility in regard to reporting mandatory and discretionary triggers as part of the financial responsibility standards, class action bans and pre-dispute arbitration agreements, submission of arbitral and judicial records, and repayment rates. On August 30, 2019, the Department finalized the regulations derived from the 2017-2018 negotiated rulemaking process and subsequent public comments. This version of the borrower defense regulations applies to all federal student loans made on or after July 1, 2020, and, among other things: grants borrowers the right to assert borrower defense to repayment claims against institutions, regardless of whether the loan is in default or in collection proceedings; allows borrowers to file defense to repayment claims three years from either the student's date of graduation or withdrawal from the institution; and gives students the ability to allege a specific amount of financial harm and to obtain relief in an amount determined by the Department, which may be greater or lesser than their original claim amount. It also includes financial triggers and other factors for recalculating an institution's financial responsibility composite score that differ from those in the 2016 regulations. On June 8, 2020, President Trump vetoed House Joint Resolution 56, a Congressional Review Act resolution that would block the Trump administration’s rewrite of the Obama administration borrower defense to repayment rule. On June 26, 2020, the House failed to override President Trump’s veto of a bill that would have undone the Trump administration’s borrower-defense rule. The rule went into effect on July 1, 2020 and will apply to any federal student loans made on that date or after. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with GAAP, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated, the best estimate within that range should be accrued. If no estimate is better than another, the Company records the minimum estimated liability in the range. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. Below is a list of material legal proceedings to which the Company or its subsidiaries is a party. California Attorney General Investigation of For-Profit Educational Institutions In January 2013, the Company received from the Attorney General of the State of California (“CA Attorney General”) an Investigative Subpoena relating to the CA Attorney General’s investigation of for-profit educational institutions. Pursuant to the Investigative Subpoena, the CA Attorney General requested documents and detailed information for the time period March 1, 2009 to the date of the Investigative Subpoena. On July 24, 2013, the CA Attorney General filed a petition to enforce certain categories of the Investigative Subpoena related to recorded calls and electronic marketing data. On September 25, 2013, the Company reached an agreement with the CA Attorney General to produce certain categories of the documents requested in the petition and stipulated to continue the hearing on the petition to enforce from October 3, 2013 to January 9, 2014. On January 13, 2014 and June 19, 2014, the Company received additional Investigative Subpoenas from the CA Attorney General, each requesting additional documents and information for the time period March 1, 2009 through each such date. Representatives from the Company met with representatives from the CA Attorney General’s office on several occasions to discuss the status of the investigation, additional information requests, and specific concerns related to possible unfair business practices in connection with the Company’s recruitment of students and debt collection practices. The parties also discussed a potential resolution involving injunctive relief, other non-monetary remedies and a payment to the CA Attorney General and in the third quarter of 2016, the Company recorded an expense of $8.0 million related to the cost of resolving this matter. The parties did not reach a resolution and on November 29, 2017, the CA Attorney General filed suit against Ashford and the Company. The Company intends to vigorously defend this case and emphatically denies the allegations made by the CA Attorney General that it ever deliberately misled its students, falsely advertised its programs, or in any way was not fully accurate in its statements to investors. However, the outcome of this legal proceeding is uncertain at this point because of the many questions of fact and law that may arise. At present, the Company cannot reasonably estimate any updated range of loss for this action based on currently available information and as such, the prior accrual of $8.0 million remains and is recorded on the accounts payable and accrued liabilities line item on the condensed consolidated balance sheets. Massachusetts Attorney General Investigation of Bridgepoint Education, Inc. and Ashford University On July 21, 2014, the Company and Ashford received from the Attorney General of the State of Massachusetts (“MA Attorney General”) a Civil Investigative Demand (“MA CID”) relating to the MA Attorney General’s investigation of for-profit educational institutions and whether the university’s business practices complied with Massachusetts consumer protection laws. Pursuant to the MA CID, the MA Attorney General has requested from the Company and Ashford documents and information for the time period January 1, 2006 to present. The Company is cooperating with the investigation and cannot predict the eventual scope, duration or outcome of the investigation at this time. Stein Securities Class Action On March 8, 2019, a securities class action complaint (the “Stein Complaint”) was filed in the U.S. District Court for the Southern District of California by Shiva Stein naming the Company, Andrew Clark, Kevin Royal, and Joseph D’Amico as defendants (the “Defendants”). The Stein Complaint alleges that Defendants made false and materially misleading statements and failed to disclose material adverse facts regarding the Company's business, operations and prospects, specifically that the Company had applied an improper revenue recognition methodology to students enrolled in the FTG program. The Stein Complaint asserts a putative class period stemming from March 8, 2016 to March 7, 2019. The Stein Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On October 1, 2019, the plaintiff filed a substantially similar amended complaint. On November 27, 2019, all defendants filed a motion to dismiss, which was granted by the Court on June 15, 2020. As a result, the matter is now concluded. Obrochta v. Clark, et al. Shareholder Derivative Actions On February 13, 2020, a shareholder derivative complaint was filed in the Superior Court of the State of California in San Diego. The complaint asserts derivative claims on the Company's behalf against certain of its current and former officers and directors. The complaint is captioned Obrochta v. Clark, et al. and generally alleges that the individual defendants breached their fiduciary duties of candor, good faith and loyalty, wasted corporate assets and were unjustly enriched. The lawsuit seeks unspecified monetary relief and disgorgement, as well as other equitable relief and attorneys’ fees. Following the dismissal of the underlying Stein securities class action, all parties agreed to voluntarily dismiss the case. As a result, the matter is now concluded. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete annual financial statements and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission (“SEC”) on February 20, 2020. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary to present a fair statement of the Company’s condensed consolidated financial position, results of operations and cash flows as of and for the periods presented. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by GAAP for complete annual consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements. Actual results could differ from those estimates. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company has no components of other comprehensive income (loss), and therefore, comprehensive income (loss) equals net income (loss). |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Credit Losses Accounts receivable represent the Company’s unconditional right to consideration arising from the transfer of tuition, digital materials, and technology and other fees under contracts with customers. Students generally fund their education costs through grants and/or loans under various Title IV programs, tuition assistance from military and corporate employers, and/or personal funds. With the exception of students enrolled under the Full Tuition Grant (“FTG”) program, payments are due on the respective course start date and are generally considered delinquent 120 days after that date. Accounts receivable are initially recorded at the amount management expects to collect under each customer contract and are adjusted for an allowance for credit losses at each reporting period. The Company determines its allowance for credit losses using a loss-rate method combined with an aging schedule approach, which is appropriate given the short-term nature of a substantial majority of the Company’s receivables and as collections vary significantly based upon a receivable’s aging bucket. Also, historical loss information is a reasonable basis on which to determine current expected credit losses for accounts receivable held at the reporting date because the risk characteristics of the Company’s customers and its credit practices have not changed significantly over time. The Company calculates separate historical loss rates for receivables under the FTG program and receivables from all other customers, on the basis of the different risk profiles and historical loss-rate experience with each type of customer. Additionally, the Company continuously monitors macroeconomic activity as well as other current conditions (e.g., internal Title IV processing times, economic downturns, cohort default rates, etc.) and their potential impact on collections to ensure the historical experience remains in line with current conditions and future short-term expectations. The allowance for credit losses is recorded within instructional costs and services in the consolidated statements of income (loss). The Company writes off accounts receivable when the student account is deemed uncollectible, which typically occurs when the Company has exhausted all collection efforts. |
Debt | Notes Payable The fair value of the Company’s outstanding notes payable is estimated using the net present value of the payments, discounted at an interest rate that is consistent with market interest rates. The Company entered into a contract whereby its counterparty advanced funds to the Company for certain program development costs, which the Company is obligated to repay out of future revenues from the developed program. The Company recognized these advances as a debt obligation, and expects to begin repayments from future program revenues in 2024, five years from the contract start date. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The new standard is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The new standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. ASU 2016-03 is effective for SEC filers for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company applied the new standard, including all applicable updates, effective January 1, 2020, using a loss-rate method combined with an aging schedule approach. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) . This ASU modifies the disclosure requirements on fair value measurements in Topic 820 and removed, updated and added certain disclosure requirements. Some of these changes include, removing the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy, clarification of measurement uncertainty disclosure, and changes in realized gains and losses for the period included in other comprehensive income for recurring level 3 fair value measurements held as of the end of the reporting period, among others. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. The adoption of ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements. |
Goodwill and Intangible Assets, Policy | Goodwill and Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events and circumstances warrant. Historically, this testing has been performed as of October 1 of each fiscal year, however the Company determined that the testing date should be moved up to August 31 of each fiscal year. The Company does not consider this change to be material. The Company believes the timing of assessment is preferable as it better aligns with the Company’s planning and forecasting process and also provides additional time to complete the annual assessment in advance of quarterly reporting deadlines. The change in assessment date did not delay, accelerate, or cause avoidance of a potential impairment charge. The Company has three distinct reporting units including (i) Zovio (which includes Ashford), (ii) Fullstack and (iii) TutorMe. To evaluate the impairment of goodwill, the Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. To evaluate the impairment of the indefinite-lived intangible assets, the Company assesses the fair value of the assets to determine whether they are greater or less than the carrying values. Determining the fair value of indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain and may include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company's assessment through the third quarter of 2020 has not resulted in any impairment of its goodwill or indefinite-lived intangibles. |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2020 | |
Business Combinations [Abstract] | ||
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the purchase price, as well as the final allocation of the purchase price relating to the assets and liabilities purchased (in thousands): Cash consideration for acquired assets $ 17,743 Fair value of equity 12,336 Fair value of contingent consideration payable 3,250 Total purchase price $ 33,329 Purchase Price Allocation: Cash and cash equivalents $ 585 Accounts receivable 5,604 Prepaid and other assets 665 Property and equipment 167 Operating lease assets 1,297 Intangible assets 11,605 Other long-term assets 20 Accounts payable and accrued liabilities (496) Deferred revenue (2,350) Long-term liabilities (1,297) Total identifiable net assets acquired $ 15,800 Deferred tax liability (2,166) Goodwill 19,695 Total purchase consideration $ 33,329 The following table summarizes the purchase price, as well as the final allocation of the purchase price relating to the assets and liabilities purchased (in thousands): Cash consideration for acquired assets $ 3,028 Fair value of equity 2,026 Total purchase price $ 5,054 Purchase Price Allocation: Cash and cash equivalents $ 214 Accounts receivable 46 Intangible assets 1,730 Accounts payable and accrued liabilities (35) Deferred revenue (200) Long-term liabilities (3) Total identifiable net assets acquired $ 1,752 Deferred tax liability (260) Goodwill 3,562 Total purchase consideration $ 5,054 | |
Business Acquisition, Pro Forma Information | The following table presents unaudited pro forma financial information, as if all acquisitions had been included in the company’s results as of January 1, 2018 (in thousands, except per share amounts): Year Ended December 31, 2019 2018 Revenue $ 421,390 $ 457,208 Net income (loss) $ (56,661) $ 4,311 Basic income (loss) per share $ (1.92) $ 0.16 Diluted income (loss) per share $ (1.92) $ 0.16 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Disaggregation of revenue | The following table presents the Company’s net revenue disaggregated based on the revenue source (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Tuition revenue, net $ 93,183 $ 95,043 $ 277,533 $ 291,729 Digital materials revenue, net 5,809 5,890 17,415 18,947 Technology fee revenue, net 2,628 2,856 7,628 9,381 Other revenue, net (1) 546 462 1,402 1,453 Total revenue, net $ 102,166 $ 104,251 $ 303,978 $ 321,510 (1) Primarily consists of revenues generated from services such as graduation fees, transcript fees, and other miscellaneous services. The following table presents the Company’s net revenue disaggregated based on the timing of revenue recognition (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Over time, over period of instruction $ 82,659 $ 85,110 $ 244,872 $ 264,555 Over time, full tuition grant (1) 13,948 13,599 42,792 38,908 Point in time (2) 5,559 5,542 16,314 18,047 Total revenue, net $ 102,166 $ 104,251 $ 303,978 $ 321,510 (1) Represents revenue generated from the FTG program. (2) Represents revenue generated from digital textbooks and other miscellaneous fees. |
Deferred revenue of Company's contracts with customers | Below are the opening and closing balances of deferred revenue from the Company’s contracts with customers (in thousands): 2020 2019 Deferred revenue opening balance, January 1 $ 23,356 $ 21,768 Deferred revenue closing balance, September 30 29,413 22,549 Increase $ 6,057 $ 781 |
Restructuring and Impairment _2
Restructuring and Impairment Expense Restructuring and Impairment Expense (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and impairment charges | The following table summarizes the amounts recorded in the restructuring and impairment expense line item on the Company’s condensed consolidated statements of income (loss) for each of the periods presented (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Student transfer agreement costs (credit) $ — $ (32) $ — $ (171) Severance costs (70) 1,220 2,902 6,231 Lease exit and other costs 254 1,279 529 1,830 Total restructuring and impairment expense $ 184 $ 2,467 $ 3,431 $ 7,890 |
Schedule of restructuring reserve by type of cost | The following table summarizes the changes in the Company's restructuring and impairment liability by type during the nine months ended September 30, 2020 (in thousands): Student Transfer Agreement Costs Severance Costs Lease Exit and Other Costs Total Balance at December 31, 2019 $ 1,296 $ 8,001 $ 976 $ 10,273 Restructuring and impairment expense — 2,902 529 3,431 Payments and adjustments (14) (10,067) (621) (10,702) Balance at September 30, 2020 $ 1,282 $ 836 $ 884 $ 3,002 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Information of Short and Long-term Investments | The following tables summarize the fair value information as of September 30, 2020 and December 31, 2019, respectively (in thousands): As of September 30, 2020 Level 1 Level 2 Level 3 Total Mutual funds $ 1,339 $ — $ — $ 1,339 As of December 31, 2019 Level 1 Level 2 Level 3 Total Mutual funds $ 2,502 $ — $ — $ 2,502 Contingent consideration $ — $ — $ 3,150 $ 3,150 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net, consisted of the following (in thousands): As of As of Accounts receivable $ 52,125 $ 48,663 Less allowance for credit losses 12,416 13,712 Accounts receivable, net $ 39,709 $ 34,951 |
Changes in Allowance for Doubtful Accounts, Accounts Receivable | The following table presents the changes in the allowance for credit losses for the nine months ended September 30, 2020 (in thousands): Beginning Balance Charged to Expense Write-offs Recoveries of amounts Ending Balance FTG-related allowance $ 1,749 $ 1,524 $ (1,872) $ 337 $ 1,738 Non-FTG related allowance 11,963 8,321 (14,124) 4,518 10,678 Total allowance for credit losses $ 13,712 $ 9,845 $ (15,996) $ 4,855 $ 12,416 The following table presents the changes in the allowance for credit losses for the nine months ended September 30, 2019 (in thousands): Beginning Balance Charged to Expense Write-offs Recoveries of amounts Ending Balance FTG-related allowance $ 1,505 $ 1,395 $ (1,797) $ 377 $ 1,480 Non-FTG related allowance 10,675 9,113 (15,928) 4,820 8,680 Total allowance for credit losses $ 12,180 $ 10,508 $ (17,725) $ 5,197 $ 10,160 |
Other Significant Balance She_2
Other Significant Balance Sheet Accounts (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): As of As of Prepaid expenses $ 4,490 $ 4,593 Prepaid licenses 3,546 2,794 Prepaid income taxes 48 18 Income tax receivable (1) 8,582 1,695 Prepaid insurance 1,967 995 Insurance recoverable 382 670 Other current assets 1,130 9,759 Total prepaid expenses and other current assets $ 20,145 $ 20,524 |
Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): As of As of Furniture and office equipment $ 36,206 $ 43,579 Software 7,419 7,381 Leasehold improvements 16,551 19,973 Vehicles 22 22 Total property and equipment 60,198 70,955 Less accumulated depreciation and amortization (28,767) (36,661) Total property and equipment, net $ 31,431 $ 34,294 |
Goodwill and Intangibles, Net | Goodwill and intangibles, net, consisted of the following (in thousands): September 30, 2020 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,787 $ (12,581) $ 1,206 Purchased intangible assets 29,185 (14,372) 14,813 Total definite-lived intangible assets $ 42,972 $ (26,953) $ 16,019 Goodwill and indefinite-lived intangibles 24,578 Total goodwill and intangibles, net $ 40,597 December 31, 2019 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 21,273 $ (19,667) $ 1,606 Purchased intangible assets 29,185 (10,950) 18,235 Total definite-lived intangible assets $ 50,458 $ (30,617) $ 19,841 Goodwill and indefinite-lived intangibles 24,578 Total goodwill and intangibles, net $ 44,419 |
Intangibles, Estimated Remaining Amortization Expense | The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands): Year Ended December 31, Remainder of 2020 $ 1,324 2021 4,192 2022 3,567 2023 3,394 2024 1,864 2025 and thereafter 1,678 Total future amortization expense $ 16,019 |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following (in thousands): As of As of Accounts payable $ 12,575 $ 6,603 Accrued salaries and wages 8,260 11,872 Accrued bonus 9,619 6,560 Accrued vacation 4,699 5,123 Accrued litigation and fees 8,041 8,041 Accrued expenses 15,278 20,140 Current leases payable 7,774 7,875 Accrued insurance liability 1,599 1,946 Total accounts payable and accrued liabilities $ 67,845 $ 68,160 |
Deferred Revenue and Student Deposits | Deferred revenue and student deposits consisted of the following (in thousands): As of As of Deferred revenue $ 29,413 $ 23,356 Student deposits 30,141 31,928 Total deferred revenue and student deposits $ 59,554 $ 55,284 |
Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): As of As of Uncertain tax positions $ 28 $ 102 Notes payable 2,763 — Contingent consideration — 3,150 Other long-term liabilities 1,532 2,095 Total other long-term liabilities $ 4,323 $ 5,347 |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted income (loss) per share for the periods indicated (in thousands, except per share data): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Numerator: Net income (loss) $ 1,121 $ (7,558) $ 8,288 $ (31,797) Denominator: Weighted average number of common shares outstanding 32,646 30,263 31,711 29,230 Effect of dilutive options and stock units 1,369 — 631 — Diluted weighted average number of common shares outstanding 34,015 30,263 32,342 29,230 Income (loss) per share: Basic $ 0.03 $ (0.25) $ 0.26 $ (1.09) Diluted $ 0.03 $ (0.25) $ 0.26 $ (1.09) |
Antidilutive Securities | The following table sets forth the number of stock options and stock units excluded from the computation of diluted income (loss) per share for the periods indicated below because their effect was anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Stock options 1,525 2,141 1,654 1,983 Stock units — 3,228 577 1,461 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2020reportingUnit | |
Accounting Policies [Abstract] | |
Number of days before deemed delinquent | 120 days |
Number of reporting units | 3 |
Number of years after contract date | 5 years |
Business Combinations (Details)
Business Combinations (Details) | Aug. 03, 2020USD ($) | Apr. 03, 2019USD ($)shares | Apr. 01, 2019USD ($)university_contractshares | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares |
Business Acquisition [Line Items] | |||||||||||||
Total purchase price | $ 1 | $ 5,054,000 | |||||||||||
Gain (Loss) on Disposition of Assets | $ 60,000,000 | ||||||||||||
Carrying value of assets | 271,082,000 | $ 271,082,000 | $ 250,138,000 | ||||||||||
Revenue | 102,166,000 | $ 104,251,000 | 303,978,000 | $ 321,510,000 | |||||||||
Operating Income (Loss) | 654,000 | (7,849,000) | (4,556,000) | (35,373,000) | |||||||||
Net income (loss) | 1,121,000 | $ 5,147,000 | $ 2,020,000 | $ (7,558,000) | $ (17,597,000) | $ (6,642,000) | 8,288,000 | (31,797,000) | |||||
Fair value of equity | 2,026,000 | $ 1,245,000 | |||||||||||
Cash consideration for acquired assets | 3,028,000 | ||||||||||||
Fair value of contingent consideration payable | $ 0 | $ 483,000 | |||||||||||
Cash and cash equivalents | 214,000 | ||||||||||||
Accounts receivable | 46,000 | ||||||||||||
Intangible assets | 1,730,000 | ||||||||||||
Accounts payable | (35,000) | ||||||||||||
Deferred revenue | (200,000) | ||||||||||||
Long-term liabilities | (3,000) | ||||||||||||
Total identifiable net assets acquired | 1,752,000 | ||||||||||||
Deferred tax liability | (260,000) | ||||||||||||
Goodwill | 3,562,000 | ||||||||||||
Business Acquisition, Pro Forma Revenue | 421,390,000 | $ 457,208,000 | |||||||||||
Business Acquisition, Pro Forma Net Income (Loss) | $ (56,661,000) | $ 4,311,000 | |||||||||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ / shares | $ (1.92) | $ 0.16 | |||||||||||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ / shares | $ (1.92) | $ 0.16 | |||||||||||
Liability | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total purchase price | 37,500,000 | ||||||||||||
Cash Distribution | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total purchase price | $ 16,500,000 | ||||||||||||
Sale of Subsidiary Gain (Loss) | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Gain (Loss) on Disposition of Assets | 55,000,000 | ||||||||||||
Measurement Input, Cost to Sell | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Gain (Loss) on Disposition of Assets | $ 5,000,000 | ||||||||||||
Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total purchase price | $ 33,329,000 | ||||||||||||
Carrying value of assets | 7,100,000 | ||||||||||||
Consideration received | 17,700,000 | ||||||||||||
Purchase price adjustments | 1,800,000 | ||||||||||||
Third-party adjustments | $ 2,000,000 | ||||||||||||
Shares of the Company's stock | shares | 2,443,260 | ||||||||||||
Contingently issuable shares | shares | 2,250,000 | ||||||||||||
Incentive retention pool | $ 5,000,000 | ||||||||||||
Payment term | 2 years | ||||||||||||
Revenue | $ 9,200,000 | ||||||||||||
Operating Income (Loss) | 10,600,000 | ||||||||||||
Net income (loss) | 10,600,000 | ||||||||||||
Business Combination, Acquisition Related Costs | 4,700,000 | ||||||||||||
Goodwill expected to be deductible | $ 0 | ||||||||||||
Fair value of equity | 12,336,000 | ||||||||||||
Cash consideration for acquired assets | 17,743,000 | ||||||||||||
Fair value of contingent consideration payable | 3,250,000 | ||||||||||||
Cash and cash equivalents | 585,000 | ||||||||||||
Accounts receivable | 5,604,000 | ||||||||||||
Prepaid and other assets | 665,000 | ||||||||||||
Property and equipment | 167,000 | ||||||||||||
Operating lease assets | 1,297,000 | ||||||||||||
Intangible assets | 11,605,000 | ||||||||||||
Other long-term assets | 20,000 | ||||||||||||
Accounts payable | (496,000) | ||||||||||||
Deferred revenue | (2,350,000) | ||||||||||||
Long-term liabilities | (1,297,000) | ||||||||||||
Total identifiable net assets acquired | 15,800,000 | ||||||||||||
Deferred tax liability | (2,166,000) | ||||||||||||
Goodwill | $ 19,695,000 | ||||||||||||
TutorMe | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Carrying value of assets | $ 600,000 | ||||||||||||
Consideration received | 3,000,000 | ||||||||||||
Third-party adjustments | $ 1,200,000 | ||||||||||||
Shares of the Company's stock | shares | 309,852 | ||||||||||||
Revenue | 900,000 | ||||||||||||
Operating Income (Loss) | 3,200,000 | ||||||||||||
Net income (loss) | 3,200,000 | ||||||||||||
Business Combination, Acquisition Related Costs | $ 1,900,000 | ||||||||||||
Goodwill expected to be deductible | $ 0 | ||||||||||||
TutorMe | Performance Shares | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Options assumed | shares | 79,199 | ||||||||||||
Fair value of equity | $ 293,621 | ||||||||||||
TutorMe | Service Requirement Awards | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Options assumed | shares | 231,406 | ||||||||||||
Customer Contracts | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingently issuable shares | shares | 500,000 | ||||||||||||
Revenue Benchmark | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingently issuable shares | shares | 500,000 | ||||||||||||
Service Requirement Awards | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingently issuable shares | shares | 1,250,000 | ||||||||||||
Minimum | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Useful life | 2 years | ||||||||||||
Minimum | TutorMe | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Useful life | 2 years | ||||||||||||
Minimum | Revenue Benchmark | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue sliding scale | $ 25,000,000 | ||||||||||||
New university contract threshold | university_contract | 4 | ||||||||||||
Maximum | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Useful life | 10 years | ||||||||||||
Maximum | TutorMe | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Useful life | 10 years | ||||||||||||
Maximum | Revenue Benchmark | Fullstack Academy | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue sliding scale | $ 35,000,000 | ||||||||||||
New university contract threshold | university_contract | 8 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)coursereportableSegmentdisbursementPeriod | Sep. 30, 2019USD ($) | Jan. 01, 2020USD ($) | Jan. 01, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | ||||||
Number of reportable segments | reportableSegment | 1 | |||||
Conditional admission term | 21 days | |||||
Number of disbursement periods | disbursementPeriod | 2 | |||||
Maximum number of courses funded per disbursement period | course | 4 | |||||
Maximum number of prepaid courses | course | 4 | |||||
Grant term | 12 months | |||||
Maximum number of undergraduate courses under full tuition grant program | course | 10 | |||||
Maximum number of graduate courses under full tuition grant program | course | 8 | |||||
Payment plan extension period | 3 years | |||||
Revenue | $ 102,166 | $ 104,251 | $ 303,978 | $ 321,510 | ||
Deferred revenue, opening balance | 29,413 | 22,549 | 29,413 | 22,549 | $ 23,356 | $ 21,768 |
Deferred revenue, ending balance | 29,413 | 22,549 | 29,413 | 22,549 | $ 23,356 | $ 21,768 |
Deferred revenue, increase (decrease) | 6,057 | 781 | ||||
Deferred revenue, revenue recognized | $ 23,300 | 21,800 | ||||
Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Course term | 35 days | |||||
Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Course term | 42 days | |||||
Over time, over period of instruction | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 82,659 | 85,110 | $ 244,872 | 264,555 | ||
Over time, full tuition grant | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 13,948 | 13,599 | 42,792 | 38,908 | ||
Point in time | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 5,559 | 5,542 | 16,314 | 18,047 | ||
Tuition revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 93,183 | 95,043 | 277,533 | 291,729 | ||
Digital materials revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 5,809 | 5,890 | 17,415 | 18,947 | ||
Technology fee revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 2,628 | 2,856 | 7,628 | 9,381 | ||
Other revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | $ 546 | $ 462 | $ 1,402 | $ 1,453 |
Restructuring and Impairment _3
Restructuring and Impairment Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve at beginning of period | $ 10,273,000 | ||||
Restructuring and impairment expense | $ 184,000 | $ 2,467,000 | 3,431,000 | $ 7,890,000 | |
Payments and adjustments | (10,702,000) | ||||
Restructuring reserve at end of period | 3,002,000 | $ 10,273,000 | 3,002,000 | ||
Student Transfer Agreement Costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve at beginning of period | 1,296,000 | ||||
Restructuring and impairment expense | 0 | 1,500,000 | (32,000) | 0 | (171,000) |
Payments and adjustments | (14,000) | ||||
Restructuring reserve at end of period | 1,282,000 | 1,296,000 | 1,282,000 | ||
Severance Costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve at beginning of period | 8,001,000 | ||||
Restructuring and impairment expense | (70,000) | 1,220,000 | 2,902,000 | 6,231,000 | |
Payments and adjustments | (10,067,000) | ||||
Restructuring reserve at end of period | 836,000 | 8,001,000 | 836,000 | ||
Lease Exit and Other Costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve at beginning of period | 976,000 | ||||
Restructuring and impairment expense | 254,000 | $ 1,279,000 | 529,000 | $ 1,830,000 | |
Payments and adjustments | (621,000) | ||||
Restructuring reserve at end of period | $ 884,000 | $ 976,000 | $ 884,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | $ 0 | $ 3,150,000 | |
Reclassification from accumulated other comprehensive income, current period, before Tax | 0 | $ 0 | |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Asset | 1,600,000 | ||
Mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds | 1,339,000 | 2,502,000 | |
Contingent consideration | 3,150,000 | ||
Mutual funds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds | 1,339,000 | 2,502,000 | |
Contingent consideration | 0 | ||
Mutual funds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds | 0 | 0 | |
Contingent consideration | 0 | ||
Mutual funds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds | $ 0 | 0 | |
Contingent consideration | $ 3,150,000 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 52,125 | $ 48,663 |
Less allowance for credit losses | 12,416 | 13,712 |
Accounts receivable, net | $ 39,709 | $ 34,951 |
Accounts Receivable, Net (Chang
Accounts Receivable, Net (Change in Allowance) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | $ 13,712 | $ 12,180 |
Charged to Expense | 9,845 | 10,508 |
Write-offs | (15,996) | (17,725) |
Recoveries of amounts | 4,855 | 5,197 |
Ending Balance | 12,416 | 10,160 |
FTG-related allowance | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | 1,749 | 1,505 |
Charged to Expense | 1,524 | 1,395 |
Write-offs | (1,872) | (1,797) |
Recoveries of amounts | 337 | 377 |
Ending Balance | 1,738 | 1,480 |
Non-FTG related allowance | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | 11,963 | 10,675 |
Charged to Expense | 8,321 | 9,113 |
Write-offs | (14,124) | (15,928) |
Recoveries of amounts | 4,518 | 4,820 |
Ending Balance | $ 10,678 | $ 8,680 |
Other Significant Balance She_3
Other Significant Balance Sheet Accounts (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 4,490 | $ 4,593 |
Prepaid licenses | 3,546 | 2,794 |
Prepaid Taxes | 48 | 18 |
Income tax receivable (1) | 8,582 | 1,695 |
Prepaid insurance | 1,967 | 995 |
Insurance recoverable | 382 | 670 |
Other current assets | 1,130 | 9,759 |
Total prepaid expenses and other current assets | $ 20,145 | $ 20,524 |
Other Significant Balance She_4
Other Significant Balance Sheet Accounts (Property and Equipment, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 60,198 | $ 60,198 | $ 70,955 | ||
Less accumulated depreciation and amortization | (28,767) | (28,767) | (36,661) | ||
Total property and equipment, net | 31,431 | 31,431 | 34,294 | ||
Depreciation | 1,500 | $ 1,600 | 4,700 | $ 3,900 | |
Furniture and office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 36,206 | 36,206 | 43,579 | ||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 7,419 | 7,419 | 7,381 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 16,551 | 16,551 | 19,973 | ||
Vehicles | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 22 | $ 22 | $ 22 |
Other Significant Balance She_5
Other Significant Balance Sheet Accounts (Goodwill and Intangibles, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangibles, Net | |||||
Definite-lived intangible assets, gross carrying amount | $ 42,972 | $ 42,972 | $ 50,458 | ||
Definite-lived intangible assets, accumulated amortization | (26,953) | (26,953) | (30,617) | ||
Total future amortization expense | 16,019 | 16,019 | 19,841 | ||
Goodwill and Indefinite-Lived Intangibles | 24,578 | 24,578 | 24,578 | ||
Intangible Assets, Net (Including Goodwill), Total | 40,597 | 40,597 | 44,419 | ||
Amortization of intangible Assets | 1,300 | $ 1,300 | 4,000 | $ 3,300 | |
Capitalized Curriculum Costs | |||||
Goodwill and Intangibles, Net | |||||
Definite-lived intangible assets, gross carrying amount | 13,787 | 13,787 | 21,273 | ||
Definite-lived intangible assets, accumulated amortization | (12,581) | (12,581) | (19,667) | ||
Total future amortization expense | 1,206 | 1,206 | 1,606 | ||
Purchased Intangible Assets | |||||
Goodwill and Intangibles, Net | |||||
Definite-lived intangible assets, gross carrying amount | 29,185 | 29,185 | 29,185 | ||
Definite-lived intangible assets, accumulated amortization | (14,372) | (14,372) | (10,950) | ||
Total future amortization expense | $ 14,813 | $ 14,813 | $ 18,235 |
Other Significant Balance She_6
Other Significant Balance Sheet Accounts (Remaining Amortization Expense) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2020 | $ 1,324 | |
2021 | 4,192 | |
2022 | 3,567 | |
2023 | 3,394 | |
2024 | 1,864 | |
2025 and thereafter | 1,678 | |
Total future amortization expense | $ 16,019 | $ 19,841 |
Other Significant Balance She_7
Other Significant Balance Sheet Accounts (Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts payable | $ 12,575 | $ 6,603 |
Accrued salaries and wages | 8,260 | 11,872 |
Accrued bonus | 9,619 | 6,560 |
Accrued vacation | 4,699 | 5,123 |
Accrued litigation and fees | 8,041 | 8,041 |
Accrued expenses | 15,278 | 20,140 |
Current leases payable | 7,774 | 7,875 |
Accrued insurance liability | 1,599 | 1,946 |
Total accounts payable and accrued liabilities | $ 67,845 | $ 68,160 |
Other Significant Balance She_8
Other Significant Balance Sheet Accounts (Deferred Revenue) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred Revenue [Abstract] | ||
Deferred revenue | $ 29,413 | $ 23,356 |
Student deposits | 30,141 | 31,928 |
Total deferred revenue and student deposits | $ 59,554 | $ 55,284 |
Other Significant Balance She_9
Other Significant Balance Sheet Accounts (Other Long-term Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Uncertain tax positions | $ 28 | $ 102 |
Contingent consideration | 0 | 3,150 |
Other long-term liabilities | 1,532 | 2,095 |
Total other long-term liabilities | 4,323 | 5,347 |
Notes Payable | $ 2,763 | $ 0 |
Credit Facilities (Details)
Credit Facilities (Details) $ in Millions | Sep. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
Revolving line of credit, letters of credit outstanding | $ 17.9 |
Surety bond facility, issued amount | $ 8.6 |
Lease Obligations (Details)
Lease Obligations (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)ft²sublease | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)ft²sublease | |
Lessee, Lease, Description [Line Items] | |||
Number of subleases | sublease | 2 | 2 | |
Net sublease value | $ 1.4 | $ 2.2 | |
COLORADO | |||
Lessee, Lease, Description [Line Items] | |||
Area of Real Estate Property | ft² | 37,000 | 37,000 | |
Commitment to lease | 11 months | ||
Net sublease value | $ 0.9 | ||
COLORADO, Commencing on April 1, 2019 [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Area of Real Estate Property | ft² | 21,000 | 21,000 | |
Commitment to lease | 29 months | ||
Net sublease value | $ 1.4 |
Income Per Share (Basic and Dil
Income Per Share (Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net income (loss) | $ 1,121 | $ 5,147 | $ 2,020 | $ (7,558) | $ (17,597) | $ (6,642) | $ 8,288 | $ (31,797) |
Denominator: | ||||||||
Weighted average number of common shares outstanding (in shares) | 32,646 | 30,263 | 31,711 | 29,230 | ||||
Effect of dilutive options and stock units (in shares) | 1,369 | 0 | 631 | 0 | ||||
Diluted weighted average number of common shares outstanding (in shares) | 34,015 | 30,263 | 32,342 | 29,230 | ||||
Income (loss) per share: | ||||||||
Earnings Per Share, Basic (in dollars per share) | $ 0.03 | $ (0.25) | $ 0.26 | $ (1.09) | ||||
Earnings Per Share, Diluted (in dollars per share) | $ 0.03 | $ (0.25) | $ 0.26 | $ (1.09) |
Income Per Share (Anti-dilutive
Income Per Share (Anti-dilutive Securities) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of dilutive common shares outstanding | 1,525 | 2,141 | 1,654 | 1,983 |
Stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of dilutive common shares outstanding | 0 | 3,228 | 577 | 1,461 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1.1 | $ 3.4 | $ 6.1 | $ 8.7 |
Income tax benefit of stock-based compensation expense | 0.3 | $ 0.8 | $ 1.5 | $ 2.1 |
Grant date fair value (in dollars per share) | $ 4.28 | |||
Options granted during the period (in shares) | 0 | |||
Unrecognized compensation cost related to unvested options and RSUs | $ 6.5 | $ 6.5 | ||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-option equity instruments granted during the period (in shares) | 1,400,000 | 1,300,000 | ||
Grant date fair value (in dollars per share) | $ 2.22 | $ 5.68 | ||
Equity instruments other than options vested during period (in units) | 800,000 | 400,000 | ||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value (in dollars per share) | $ 2.18 | |||
Equity instruments other than options vested during period (in units) | 0 | 0 | ||
Other than option equity instruments granted during the period (in shares) | 1,100,000 | 800,000 | ||
Performance Shares | Market-based measure [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value (in dollars per share) | $ 6.97 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted during the period (in shares) | 200,000 | |||
Exercise of stock options (in shares) | 0 | 6,274 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 279.50% | |
CARES Act, net operating loss carryback benefit | $ 12,700 | |
Unrecognized tax benefits | 30 | $ 2,100 |
Gross unrecognized tax benefits that would impact effective tax rate if recognized | 10 | 2,000 |
Proceeds from Income Tax Refunds | $ 6,200 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 42,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 66,000 | |
Settlement with taxing authority | ||
Income Tax Contingency [Line Items] | ||
Effective tax rate | (2.70%) |
Regulatory US Department of Edu
Regulatory US Department of Education (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Oct. 31, 2018sublease | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and impairment expense | $ 184,000 | $ 2,467,000 | $ 3,431,000 | $ 7,890,000 | ||
Number of entities in merger | sublease | 2 | |||||
Eligibility for Title 4 Programs, Regulatory Compliance, Composite Score | 2.2 | |||||
Eligibility for Title 4 Programs, Regulatory Compliance, Estimated Composite Score | 0.7 | |||||
Ashford University | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Eligibility for Title 4 Programs, Regulatory Compliance, Estimated Composite Score | 1.6 | |||||
Student Transfer Agreement Costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and impairment expense | $ 0 | $ 1,500,000 | $ (32,000) | $ 0 | $ (171,000) | |
Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Eligibility for Title 4 Programs, Regulatory Compliance, Composite Score | 1.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2020USD ($) |
CALIFORNIA | |
Loss Contingencies [Line Items] | |
Estimated litigation liability | $ 8 |