Bridgepoint Education (BPI) Posts Q1 Loss of 10c/Share; Will Miss 10-Q Deadline

Bridgepoint Education (NYSE: BPI) reported Q1 EPS of ($0.10), $0.09 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $160.5 million versus the consensus estimate of $170.39 million.

Notification of Inability to Timely File Quarterly Report on Form 10-Q

The Company has determined it will be unable to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 by the filing deadline of May 12, 2014. The Company is working to quantify the impact of an outstanding comment the Company received from the Securities and Exchange Commission. The comment was received in connection with the SEC's review of the Company's periodic reports, and relates to the Company's revenue recognition policy and accounting for doubtful accounts. Specifically, the Company has historically not determined it necessary to reassess whether collectability is reasonably assured on a student-by-student basis when recognizing revenue subsequent to a student's initial enrollment with the Company's institutions. On May 2, 2014, the SEC informed the Company that such a reassessment is required under accounting principles generally accepted in the United States upon certain changes in circumstances, such as when a student loses financial aid eligibility. Based on the Company's internal analysis to date, management has preliminarily estimated that application of a student-by-student reassessment during the quarter ended March 31, 2014 resulted in decreases in revenue and bad debt expense of $0.7 million and $0.2 million, respectively. These adjustments are reflected in the preliminary results contained herein; however, the Company's analysis in not complete and these adjustments, and the preliminary results, may change. The Company is also evaluating whether the lack of a student-by-student reassessment (i) changes management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2013, or (ii) caused any previously issued quarterly or annual financial statements for the periods from January 1, 2011 through December 31, 2013 to be materially misstated. At this time, management is unable to conclude whether any previously issued financial statements are materially misstated. In the event any prior period is materially misstated, the financial statements for such period and those of subsequent periods will be required to be restated in an amendment to our Annual Report on Form 10-K for the year December 31, 2013. Even if no prior period financial statements are materially misstated, our previously issued financial statements and our results for the quarter ended March 31, 2014 may be required to be revised on a prospective basis.

"Under the previous revenue recognition policy, revenues recognized subsequent to a student losing financial aid eligibility and not collected were included in our bad debt expense. Going forward our policy will exclude these revenues, and will result in a corresponding decrease in our bad debt expense that will be realized over the subsequent three quarters," said Daniel Devine, CFO of Bridgepoint Education.

Student Enrollment

Total student enrollment at Bridgepoint Education's academic institutions, Ashford University and University of the Rockies, was 64,495 students at March 31, 2014, compared with 78,782 students at the end of the first quarter of 2013.

For earnings history and earnings-related data on Bridgepoint Education (BPI) click here.

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