Bridgepoint Education Inc (BPI, Financial) filed Quarterly Report for the period ended 2009-09-30.
Bridgepoint Education Inc. provides postsecondary education services. It offers associate's bachelor's master's and doctoral programs in the disciplines of business education psychology social sciences and health sciences. The Company delivers its programs online as well as at its traditional campuses located in Clinton Iowa and Colorado Springs Colorado. Headquartered in San Diego California the company was founded on the principle that those who are academically prepared deserve access to an affordable higher education without sacrificing quality transferability of credits accessibility and academic standards. Bridgepoint Education Inc has a market cap of $778.2 million; its shares were traded at around $14.59 .
General and administrative expenses. Our general and administrative expenses for the three months ended September 30, 2009 were $18.9 million, representing an increase of $7.7 million, or 69.0%, as compared to general and administrative expenses of $11.2 million for the three months ended September 30, 2008. This increase was primarily attributable to increased wages of $3.4 million, increased facilities costs of $1.3 million, increased stock-based compensation of $1.2 million, increased professional fees of $0.8 million and other costs of $1.0 million. Our general and administrative expenses as a percentage of revenue decreased by 3.8% to 14.8% for the three months ended September 30, 2009, from 18.6% for the three months ended September 30, 2008, primarily due to the efficiencies gained related to our variable cost structure.
Instructional costs and services expenses. Our instructional costs and services expenses for the nine months ended September 30, 2009 were $83.6 million, representing an increase of $41.5 million, or 98.8%, as compared to instructional costs and services expenses of $42.1 million for the nine months ended September 30, 2008. This increase was primarily due to an increase in educational support services and increases in instructional costs as a result of the increase in enrollments, as well as a $2.1 million charge related to the instructional costs and services portion of the acceleration of exit options that occurred in the second quarter of 2009. Our instructional costs and services expenses as a percentage of revenue decreased by 2.3% to 25.9% for the nine months ended September 30, 2009, as compared to 28.2% for the nine months ended September 30, 2008. This decrease in 2009 was driven by improvements in our variable cost structure due to ongoing work on process improvements, including more efficient course scheduling and use of faculty, offset partially by the exit option charge. Bad debt as a percentage of revenue was 4.9% for the nine months ended September 30, 2009 as compared to 5.9% for the nine months ended September 30, 2008, primarily due to the procedural improvements in the processing of receivables.
Marketing and promotional expenses. Our marketing and promotional expenses for the nine months ended September 30, 2009 were $105.3 million, representing an increase of $50.8 million, or 93.2%, as compared to marketing and promotional expenses of $54.5 million for the nine months ended September 30, 2008. This increase was driven by greater spending in targeted marketing and online media and an increase in recruitment and marketing staffing, as well as a $5.0 million charge related to the marketing and promotional portion of the acceleration of exit options that occurred in the second quarter of 2009. Our marketing and promotional expenses as a percentage of revenue decreased by 3.8% to 32.7% for the nine months ended September 30, 2009, from 36.5% for the nine months ended September 30, 2008, primarily due to improvements in our variable cost structure as they relate to advertising.
General and administrative expenses. Our general and administrative expenses for the nine months ended September 30, 2009 were $85.9 million, representing an increase of $59.6 million, or 226.3%, as compared to general and administrative expenses of $26.3 million for the nine months ended September 30, 2008. This increase was primarily attributable to (i) an $11.1 million charge related to the stockholder settlement in the first quarter of 2009 and (ii) a $23.3 million charge related to the general and administrative portion of the acceleration of exit options that occurred in the second quarter of 2009, as well as to increased wages of $10.6 million, increased facilities costs of $3.7 million, increased professional fees of $5.0 million, increased recurring stock-based compensation charges of $2.1 million, increased bonus of $1.5 million, increased travel of $0.7 million and other costs of $1.6 million. Our general and administrative expenses as a percentage of revenue increased by 8.9% to 26.6% for the nine months ended September 30, 2009, from 17.7% for the nine months ended September 30, 2008, primarily due to the increased costs noted above.
We financed our operating activities and capital expenditures during the nine months ended September 30, 2009 and 2008 primarily through cash provided by operating activities. We realized net proceeds from our initial public offering in April 2009 of $28.1 million, of which $27.7 million was used to pay the accreted value of the redeemable convertible preferred stock upon the optional conversion of all outstanding shares of such preferred stock at the closing of our initial public offering. Our cash and cash equivalents were $111.3 million at September 30, 2009 and $56.5 million at December 31, 2008. Our restricted cash was $25,000 at September 30, 2009 and $0.7 million at December 31, 2008. At September 30, 2009, we had marketable securities of $45.0 million. We had no marketable securities as of December 31, 2008.
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Bridgepoint Education Inc. provides postsecondary education services. It offers associate's bachelor's master's and doctoral programs in the disciplines of business education psychology social sciences and health sciences. The Company delivers its programs online as well as at its traditional campuses located in Clinton Iowa and Colorado Springs Colorado. Headquartered in San Diego California the company was founded on the principle that those who are academically prepared deserve access to an affordable higher education without sacrificing quality transferability of credits accessibility and academic standards. Bridgepoint Education Inc has a market cap of $778.2 million; its shares were traded at around $14.59 .
Highlight of Business Operations:
We expect certain expenses to have a significant effect on the comparability of recent and future results of operations. In particular, our operating results have been adversely impacted by the recording of expenses related to (i) the settlement of the stockholder dispute in the first quarter of 2009, an expense of $11.1 million (of which $10.6 million was a non-cash expense) and (ii) the acceleration of exit options in the second quarter of 2009, a non-cash expense of $30.4 million. See Note 8, "Stock-Based CompensationAcceleration of Exit Options" and Note 13, "Settlement of Stockholder Dispute," to the condensed consolidated financial statements which are included in Part I, Item 1 of this report. In addition, we estimate that our incremental annual costs associated with being a publicly traded company will be between $2.5 million and $4.0 million per year.General and administrative expenses. Our general and administrative expenses for the three months ended September 30, 2009 were $18.9 million, representing an increase of $7.7 million, or 69.0%, as compared to general and administrative expenses of $11.2 million for the three months ended September 30, 2008. This increase was primarily attributable to increased wages of $3.4 million, increased facilities costs of $1.3 million, increased stock-based compensation of $1.2 million, increased professional fees of $0.8 million and other costs of $1.0 million. Our general and administrative expenses as a percentage of revenue decreased by 3.8% to 14.8% for the three months ended September 30, 2009, from 18.6% for the three months ended September 30, 2008, primarily due to the efficiencies gained related to our variable cost structure.
Instructional costs and services expenses. Our instructional costs and services expenses for the nine months ended September 30, 2009 were $83.6 million, representing an increase of $41.5 million, or 98.8%, as compared to instructional costs and services expenses of $42.1 million for the nine months ended September 30, 2008. This increase was primarily due to an increase in educational support services and increases in instructional costs as a result of the increase in enrollments, as well as a $2.1 million charge related to the instructional costs and services portion of the acceleration of exit options that occurred in the second quarter of 2009. Our instructional costs and services expenses as a percentage of revenue decreased by 2.3% to 25.9% for the nine months ended September 30, 2009, as compared to 28.2% for the nine months ended September 30, 2008. This decrease in 2009 was driven by improvements in our variable cost structure due to ongoing work on process improvements, including more efficient course scheduling and use of faculty, offset partially by the exit option charge. Bad debt as a percentage of revenue was 4.9% for the nine months ended September 30, 2009 as compared to 5.9% for the nine months ended September 30, 2008, primarily due to the procedural improvements in the processing of receivables.
Marketing and promotional expenses. Our marketing and promotional expenses for the nine months ended September 30, 2009 were $105.3 million, representing an increase of $50.8 million, or 93.2%, as compared to marketing and promotional expenses of $54.5 million for the nine months ended September 30, 2008. This increase was driven by greater spending in targeted marketing and online media and an increase in recruitment and marketing staffing, as well as a $5.0 million charge related to the marketing and promotional portion of the acceleration of exit options that occurred in the second quarter of 2009. Our marketing and promotional expenses as a percentage of revenue decreased by 3.8% to 32.7% for the nine months ended September 30, 2009, from 36.5% for the nine months ended September 30, 2008, primarily due to improvements in our variable cost structure as they relate to advertising.
General and administrative expenses. Our general and administrative expenses for the nine months ended September 30, 2009 were $85.9 million, representing an increase of $59.6 million, or 226.3%, as compared to general and administrative expenses of $26.3 million for the nine months ended September 30, 2008. This increase was primarily attributable to (i) an $11.1 million charge related to the stockholder settlement in the first quarter of 2009 and (ii) a $23.3 million charge related to the general and administrative portion of the acceleration of exit options that occurred in the second quarter of 2009, as well as to increased wages of $10.6 million, increased facilities costs of $3.7 million, increased professional fees of $5.0 million, increased recurring stock-based compensation charges of $2.1 million, increased bonus of $1.5 million, increased travel of $0.7 million and other costs of $1.6 million. Our general and administrative expenses as a percentage of revenue increased by 8.9% to 26.6% for the nine months ended September 30, 2009, from 17.7% for the nine months ended September 30, 2008, primarily due to the increased costs noted above.
We financed our operating activities and capital expenditures during the nine months ended September 30, 2009 and 2008 primarily through cash provided by operating activities. We realized net proceeds from our initial public offering in April 2009 of $28.1 million, of which $27.7 million was used to pay the accreted value of the redeemable convertible preferred stock upon the optional conversion of all outstanding shares of such preferred stock at the closing of our initial public offering. Our cash and cash equivalents were $111.3 million at September 30, 2009 and $56.5 million at December 31, 2008. Our restricted cash was $25,000 at September 30, 2009 and $0.7 million at December 31, 2008. At September 30, 2009, we had marketable securities of $45.0 million. We had no marketable securities as of December 31, 2008.
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