Zovio Inc Reports Second Quarter 2021 Results

CHANDLER, Ariz., July 28, 2021 /PRNewswire/ -- Zovio Inc (NASDAQ: ZVO), an education technology services company, today announced its results for the three and six months ended June 30, 2021.

"We delivered second quarter 2021 results in-line with our expectations, despite the continued enrollment headwinds many higher education institutions are experiencing," commented George Pernsteiner, Zovio Board Chair and Interim CEO. "Our growth segment continues to deliver exceptional performance as both Fullstack and TutorMe added new partners during the quarter. In addition, the actions we have taken to strengthen Zovio operationally, as well as our efforts to advance our partnership with the University of Arizona Global Campus, will undoubtedly better position the Company for improved performance and long-term growth."

On December 1, 2020, the Company consummated a Sale Transaction in which the Company transferred the academic and related operations and assets comprising the University of Arizona Global Campus ("Global Campus"). The Company now provides services to Global Campus, which include recruiting, financial aid, counseling, institutional support, information technology, and academic support services. The Company made changes in its presentation of its revenue line items and operating expenses and reclassified prior periods to conform to the current presentation.

Financial Results for the Three Months Ended June 30, 2021

Revenue and other revenue for the three months ended June 30, 2021 was $69.2 million, compared with revenue and other revenue of $103.9 million for the three months ended June 30, 2020.

Operating loss for the three months ended June 30, 2021 was $4.5 million, compared with operating income of $5.3 million for the three months ended June 30, 2020.

Net loss for the three months ended June 30, 2021 was $4.0 million, compared with net income of $5.1 million for the three months ended June 30, 2020.

Diluted loss per share for the three months ended June 30, 2021 was $0.12, compared with diluted income per share of $0.16 for the three months ended June 30, 2020.

The Company recognized an income tax benefit of approximately $0.2 million for the three months ended June 30, 2021, compared with an income tax expense of $0.3 million for the three months ended June 30, 2020.

Non-GAAP Financial Results for the Three Months Ended June 30, 2021

Non-GAAP operating loss for the three months ended June 30, 2021 was $1.0 million, compared with non-GAAP operating income of $7.7 million for the three months ended June 30, 2020. Non-GAAP operating loss for the three months ended June 30, 2021 excludes restructuring and impairment costs of $2.3 million, separation transaction costs of $0.3 million, acquisition costs of $0.5 million and non-GAAP stock compensation of $0.4 million. Non-GAAP operating loss for the three months ended June 30, 2020 excludes restructuring and impairment expense of $0.5 million, separation transaction costs of $2.6 million and a reversal of acquisition costs of $0.6 million.

Non-GAAP net loss for the three months ended June 30, 2021 was $0.8 million, compared with non-GAAP net income of $8.0 million for the three months ended June 30, 2020. Non-GAAP net loss for the three months ended June 30, 2021 excludes restructuring and impairment costs of $2.3 million, separation transaction costs of $0.3 million, acquisition costs of $0.5 million, non-GAAP stock compensation of $0.4 million and income tax benefit of $0.3 million. Non-GAAP net income for the three months ended June 30, 2020 excludes restructuring and impairment expense of $0.5 million, separation transaction costs of $2.6 million, a reversal of acquisition costs of $0.6 million, and income tax expense of $0.4 million.

Non-GAAP diluted loss per share for the three months ended June 30, 2021 was $0.02, compared with non-GAAP diluted income per share of $0.24 for the three months ended June 30, 2020.

Financial Results for the Six Months Ended June 30, 2021

Revenue and other revenue for the six months ended June 30, 2021 was $146.0 million, compared with revenue and other revenue of $201.8 million for the six months ended June 30, 2020.

Operating loss for the six months ended June 30, 2021 was $13.8 million, compared with operating loss of $5.2 million for the six months ended June 30, 2020.

Net loss for the six months ended June 30, 2021 was $13.5 million, compared with net income of $7.2 million for the six months ended June 30, 2020.

Diluted loss per share for the six months ended June 30, 2021 was $0.41, compared with diluted income per share of $0.23 for the six months ended June 30, 2020.

The Company recognized an income tax benefit of $0.1 million for the six months ended June 30, 2021, compared with an income tax benefit of $12.5 million for the six months ended June 30, 2020.

Non-GAAP Financial Results for the Six Months Ended June 30, 2021

Non-GAAP operating loss for the six months ended June 30, 2021 was $4.1 million, compared with non-GAAP operating income of $5.0 million for the six months ended June 30, 2020. Non-GAAP operating loss for the six months ended June 30, 2021 excludes restructuring and impairment expense of $2.3 million, separation transaction costs of $1.1 million, acquisition costs of $1.3 million, non-GAAP stock compensation of $0.4 million and severance costs of $4.6 million. Non-GAAP operating income for the six months ended June 30, 2020 excludes restructuring and impairment expense of $3.2 million, separation transaction costs of $4.1 million and acquisition costs of $2.9 million.

Non-GAAP net loss for the six months ended June 30, 2021 was $4.1 million, compared with non-GAAP net income of $4.8 million for the six months ended June 30, 2020. Non-GAAP net loss for the six months ended June 30, 2021 excludes restructuring and impairment expense of $2.3 million, separation transaction costs of $1.1 million, acquisition costs of $1.3 million, non-GAAP stock compensation of $0.4 million, severance costs of $4.6 million and income tax benefit of $0.3 million. Non-GAAP net income for the six months ended June 30, 2020 excludes restructuring and impairment expense of $3.2 million, separation transaction costs of $4.1 million, net acquisition costs of $2.9 million and income tax benefit of $12.6 million.

Non-GAAP diluted loss per share for the six months ended June 30, 2021 was $0.12, compared with non-GAAP diluted income per share of $0.15 for the six months ended June 30, 2020.

Balance Sheet and Cash Flow

As of June 30, 2021, the Company had combined cash and cash equivalents of $24.0 million, compared with combined cash and cash equivalents of $35.5 million as of December 31, 2020.

The Company used $16.3 million of cash in operating activities during the six months ended June 30, 2021, compared with $6.7 million of cash provided by operating activities during the six months ended June 30, 2020.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP diluted income (loss) per share, EBITDA and Adjusted EBITDA. These non-GAAP measures exclude restructuring and impairment expense, separation transaction costs, acquisition costs, certain stock compensation, severance costs, as well as certain income tax adjustments, as applicable. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and are not based on a comprehensive set of accounting rules. Management believes non-GAAP financial measures are useful in providing investors with an understanding of how specific line items in the consolidated statements of income (loss) are affected by items that may not be indicative of the operating results of the Company's core business. To the extent that other companies use similar methods in calculating and reporting non-GAAP operating results, the Company believes provision of supplemental non-GAAP financial information allows for a meaningful comparison of the Company's performance against the performance of other companies. The Company further believes that these non-GAAP financial measures provide useful information regarding its ongoing operating activities and business trends related to its results of operations, as well as a meaningful comparison with historical financial results. The Company's management and board of directors utilize these non-GAAP financial measures, together with the Company's financial statements prepared in accordance with GAAP, in developing operating budgets and evaluating the Company's performance. These non-GAAP financial measures are intended to supplement GAAP financial information, and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Refer to the accompanying tables for a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Earnings Conference Call and Webcast

Zovio Inc will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss its latest financial results and recent highlights. The dial-in number for callers in the United States is (877) 395-6119, and the dial-in number for other callers is (647) 689-5537. The access code for all callers is 8439024. A live broadcast of the call will also be available on the Company's website at https://ir.zovio.com.

About Zovio Inc

Zovio Inc (NASDAQ: ZVO) is an education technology services company that partners with higher education institutions and employers to deliver innovative, personalized solutions to help learners and leaders achieve their aspirations. The Zovio network, which includes Fullstack Academy and TutorMe, leverages its core strengths and applies its technology and capabilities to priority market needs. Using advanced data and analytics, Zovio identifies the most meaningful ways to enhance the learner experience and deliver strong outcomes for higher education institutions, employers, and learners. Zovio's purpose is to help everyone be in a class of their own. For more information, visit www.zovio.com.

Forward-Looking Statements

This news release may contain forward-looking statements which are not statements of historical fact and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding management's intentions, hopes, beliefs or expectations, and statements regarding the Company's outlook for the remainder of 2021 and beyond. These forward-looking statements are based on current information and expectations and are subject to various risks and uncertainties. The Company's actual performance or results may differ materially from those expressed in or suggested by such statements due to various factors, including, without limitation: our ability to successfully transition to being an education technology services company.

Additional information on factors that could cause actual plans implemented and actual results achieved to differ materially from those set forth in the forward-looking statements is included from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on February 24, 2021, the Company's quarterly reports on Form 10-Q and the Company's current reports on Form 8-K which are available at www.zovio.com. You should not place undue reliance on any forward-looking statements. Forward-looking statements are made on the basis of management's good faith beliefs, expectations and assumptions regarding future events based on information available at the time such statements are made. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update or revise any forward-looking statements to reflect actual results or any changes in assumptions, expectations or other factors affecting such forward-looking statements, except to the extent required by applicable securities laws.

Contact: Vickie Schray
vickie.schray@zovio.com
866 475 0317 x10003

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SOURCE Zovio