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Why Bridgepoint Education Inc (NYSE:BPI) Witnesses Declining Enrollment Trend

Boston, MA 08/08/2014 (wallstreetpr) – Bridgepoint Education Inc (NYSE:BPI) posted the second quarter and half yearly result ended in June 30, 2014. The Company experiences lower revenue due the declining trend in the enrollment process. It was due to various changes in operation, as a result of the initial accreditation from the WASC Senior College and University Commission.

Operating overview

During the quarter, revenues were down by 11% to $171.5 million from $193.5 million in the same period 2013. The decline was due to lower enrollment of online and campus students across its academic institutions University of the Rockies and Ashford University.

In 2Q2014, 61,117 students enrolled for different programs compared to 71,685 students in 2Q2013. But, the 12 months retention of students for the period between 2Q2013 and 2Q2014 was 65.6%, higher than previous year period (61.2%).

The operational initiatives raised the expenses like instructional costs and services. But, Bridgepoint Education Inc (NYSE:BPI) reported lower admissions advisory and marketing and G&A costs compared to prior year period.

Consequently, the operating income improved to $22.4 million in the period versus $19.1 million in 2Q2013. It also improved the net earnings to $13 million and diluted EPS of $0.28 compared to net earnings of $12.2 million and diluted EPS of $0.22 in 2Q2013.

Financial highlights

During the six months periods (1H2014) ended June 30, 2014, Bridgepoint Education Inc (NYSE:BPI) financed most of its operating activities and capital expenditures through the available cash at balance and cash generated from its operation.

In 1H2014, the Company used $3.8 million of cash to support the operating activities compared to $38.7 million of cash generated from operating during 1H2013. The significant decline was due to the effect of non-cash charges (bad debt of $11.5 million) and higher change in working capital. The Company reported capital expenditure of $6.2 million and expects ~$18 million for FY2014.

Bridgepoint Education Inc (NYSE:BPI) has sufficient funds to support the ongoing requirement. As of June, 2014, the Company has a cash balance of $342 million including cash and cash equivalents of $150.5 million and investment of $158.9 million.

Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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