K12's Annual Operating Income Increases 72% on 39% Revenue Growth
HERNDON, Va.--(BUSINESS WIRE)--Sep. 9, 2009--
K12 Inc. (NYSE:LRN), a leading provider of proprietary, technology-based
curriculum and education services created for online delivery to
students in kindergarten through 12th grade, today announced its results
for the fourth quarter and fiscal year 2009.
Ron Packard, Chief Executive Officer of K12 Inc. stated, “2009 was a
year in which the Company progressed on many fronts including the
continued expansion into new states, the rapid growth in high school
enrollment and the expansion of our international academy.”
Revenues for fiscal year 2009 (FY 2009) grew to $315.6 million, an
increase of 39.5 percent over the prior year, primarily due to strong
enrollment growth. EBITDA increased 68.8 percent to $43.2 million for
the full year FY 2009 over the same period in the prior year. Net income
for the year was $12.3 million as compared to net income of
$33.8 million in the same period in the prior year. Net income for the
full year fiscal year 2008 (FY 2008), excluding the $27.0 million tax
benefit, would have been $6.8 million. Operating income improved to
$22.3 million, an increase of 71.7 percent as compared to the full year
FY 2008.
“We are especially pleased with these results given the strong economic
headwinds we faced,” said John Baule, Chief Operating Officer and Chief
Financial Officer of K12 Inc.
For the year ended June 30, 2009
-
Revenues were $315.6 million, an increase of $89.3 million or 39.5
percent, as compared to revenues of $226.2 in FY 2008. Average
enrollments for FY 2009 were 54,962, an increase of 34.5 percent over
the same period FY 2008.
-
Operating income was $22.3 million, an increase of $9.3 million or
71.7 percent, as compared to operating income of $13.0 million in FY
2008. Operating margins increased to 7.1 percent of revenue,
representing a gross increase of 1.3 percentage points, as compared to
5.8 percent for FY 2008.
-
Income tax expense was $9.6 million, representing an effective tax
rate of 45.1 percent. The income tax benefit in FY 2008 was $21.1
million, due to a $27.0 million reversal of the valuation allowance on
net deferred tax assets. Had that reversal not occurred, the Company
would have recorded an income tax expense of $6.8 million,
representing an effective tax rate of 46.6% for FY 2008.
-
Net income was $12.3 million as compared to net income of
$33.8 million in FY 2008. Net income in FY 2008, excluding the $27.0
million tax benefit, would have been $6.8 million.
-
Diluted net income per share in FY 2009 was $0.42. On a pro forma
basis, excluding the income tax benefit of $27.0 million and assuming
the conversion of preferred stock, diluted net income per share for FY
2008 would have been $0.26.
-
EBITDA was $43.2 million, an increase of $17.6 million or 68.8
percent, as compared to EBITDA of $25.6 million in FY 2008. EBITDA as
a percentage of revenue improved to 13.7 percent, representing a gross
increase of 2.4 percentage points, as compared to 11.3 percent in FY
2008.
For the three months ended June 30, 2009
-
Revenues for the fourth quarter were $72.2 million, an increase of
$15.7 million or 27.8 percent, as compared to revenues of $56.5
million for the fourth quarter of FY 2008. Average enrollments for the
fourth quarter were 52,563, an increase of 31.3 percent over the
fourth quarter of FY 2008.
-
Operating loss for the fourth quarter was ($0.3) million as compared
to an operating loss of ($0.7) millions for the fourth quarter of FY
2008.
-
Income tax benefit for the fourth quarter was $0.1 million. The income
tax benefit for the fourth quarter in FY 2008 was $17.7 million. This
reflects a $17.3 million tax benefit from the reversal of the
valuation allowance on net deferred tax assets. Had that reversal not
occurred, the Company would have recorded an income tax benefit of
$0.4 million for the fourth quarter FY 2008.
-
Net loss for the fourth quarter was ($0.7) million as compared to net
income of $17.1 million for the fourth quarter of FY 2008. In FY 2008,
excluding the $17.3 million tax benefit, net income for the fourth
quarter of FY 2008 would have been a net loss of ($0.2) million.
-
Diluted net loss per share for the fourth quarter of FY 2009 was
($0.02). On a pro forma basis, excluding the income tax benefit of
$17.3 million, diluted net loss per share for the fourth quarter of FY
2008 would have been ($0.01).
-
EBITDA for the fourth quarter was $5.7 million, an increase of $2.7
million or 89.3 percent, as compared to EBITDA of $3.0 million for the
fourth quarter of FY 2008. EBITDA as a percentage of revenue was 7.8
percent, representing a gross increase 2.5 percentage points, as
compared to 5.3 percent for the fourth quarter of FY 2008.
Cash and Capital Expenditures
-
As of June 30, 2009, the Company had cash and cash equivalents of
$49.5 million and net operating loss carryforwards of $68.3 million.
-
Capital expenditures for the full year ended June 30, 2009 were $27.9
million, primarily due to $13.9 million for investments in capitalized
curriculum and $13.9 million in property and equipment. In addition,
the Company financed equipment purchases of $16.0 million through
capital leases of which $9.1 million of payments were made for the
fiscal year ended June 30, 2009. These financed purchases were
primarily for computers and software for use by students.
Conference Call
The Company will discuss the fourth quarter and full year 2009 financial
results during a conference call scheduled for September 9, 2009 at 8:30
a.m. eastern time (ET).
The conference call will be webcast and available on the K12
web site at www.K12.com
through the investor relations link. Please access the web site at least
15 minutes prior to the start of the call to register and download and
install any necessary software.
To participate in the live call, investors should dial 888-396-2298
(domestic) or 617-847-8708 (international) at 8:20 a.m. (ET). The
participant passcode is 58225971.
A replay of the call will be available starting on September 9, 2009,
through September 16, 2009, at 888-286-8010 (domestic) or 617-801-6888
(international) passcode 52143613. It will also be archived at www.k12.com
in the investor relations section for 60 days.
|
K12 INC.
|
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
2009
|
|
2008
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
49,461
|
|
|
$
|
71,682
|
|
Restricted cash and cash equivalents
|
|
|
2,500
|
|
|
|
—
|
|
Accounts receivable, net of allowance of $1,555 and $1,458 at June
30, 2009 and
|
|
|
|
|
|
|
|
|
June 30, 2008, respectively
|
|
|
52,532
|
|
|
|
30,630
|
|
Inventories, net
|
|
|
32,052
|
|
|
|
20,672
|
|
Current portion of deferred tax asset
|
|
|
3,888
|
|
|
|
8,344
|
|
Prepaid expenses
|
|
|
7,810
|
|
|
|
3,648
|
|
Other current assets
|
|
|
3,454
|
|
|
|
1,158
|
|
Total current assets
|
|
|
151,697
|
|
|
|
136,134
|
|
Property and equipment, net
|
|
|
37,860
|
|
|
|
24,536
|
|
Capitalized curriculum development costs, net
|
|
|
31,649
|
|
|
|
21,366
|
|
Deferred tax asset, net of current portion
|
|
|
14,619
|
|
|
|
12,749
|
|
Goodwill
|
|
|
1,825
|
|
|
|
1,754
|
|
Deposits and other assets
|
|
|
2,526
|
|
|
|
785
|
|
Total assets
|
|
$
|
240,176
|
|
|
$
|
197,324
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
10,366
|
|
|
$
|
14,388
|
|
Accrued liabilities
|
|
|
7,329
|
|
|
|
4,684
|
|
Accrued compensation and benefits
|
|
|
8,291
|
|
|
|
10,049
|
|
Deferred revenue
|
|
|
3,389
|
|
|
|
3,114
|
|
Current portion of capital lease obligations
|
|
|
10,240
|
|
|
|
6,107
|
|
Current portion of notes payable
|
|
|
1,034
|
|
|
|
413
|
|
Total current liabilities
|
|
|
40,649
|
|
|
|
38,755
|
|
Deferred rent, net of current portion
|
|
|
1,699
|
|
|
|
1,640
|
|
Capital lease obligations, net of current portion
|
|
|
9,222
|
|
|
|
6,445
|
|
Notes payable, net of current portion
|
|
|
1,906
|
|
|
|
196
|
|
Total liabilities
|
|
|
53,476
|
|
|
|
47,036
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Minority interest
|
|
|
4,414
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
Common stock, par value $0.0001; 100,000,000 shares
|
|
|
|
|
|
|
|
|
authorized; 29,290,486 and 27,944,826 shares issued and
|
|
|
|
|
|
|
|
|
outstanding at June 30, 2009 and June 30, 2008, respectively
|
|
|
3
|
|
|
|
3
|
|
Additional paid-in capital
|
|
|
343,304
|
|
|
|
323,621
|
|
Accumulated deficit
|
|
|
(161,021
|
)
|
|
|
(173,336
|
)
|
Total stockholders’ equity
|
|
|
182,286
|
|
|
|
150,288
|
|
Total liabilities and stockholders’ equity
|
|
$
|
240,176
|
|
|
$
|
197,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K12 INC.
|
|
|
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Year Ended June 30,
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
72,166
|
|
|
$
|
56,475
|
|
|
$
|
315,573
|
|
|
$
|
226,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
|
44,375
|
|
|
|
32,462
|
|
|
|
196,976
|
|
|
|
131,282
|
|
Selling, administrative, and other operating expenses
|
|
|
25,494
|
|
|
|
22,712
|
|
|
|
86,683
|
|
|
|
72,393
|
|
Product development expenses
|
|
|
2,560
|
|
|
|
2,021
|
|
|
|
9,575
|
|
|
|
9,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
72,429
|
|
|
|
57,195
|
|
|
|
293,234
|
|
|
|
213,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(263
|
)
|
|
|
(720
|
)
|
|
|
22,339
|
|
|
|
13,010
|
|
Interest (expense) income, net
|
|
|
(464
|
)
|
|
|
88
|
|
|
|
(982
|
)
|
|
|
(295
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax (expense) benefit and minority
interest
|
|
|
(727
|
)
|
|
|
(632
|
)
|
|
|
21,357
|
|
|
|
12,715
|
|
Income tax benefit (expense), net
|
|
|
13
|
|
|
|
17,735
|
|
|
|
(9,628
|
)
|
|
|
21,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before minority interest
|
|
|
(714
|
)
|
|
|
17,103
|
|
|
|
11,729
|
|
|
|
33,773
|
|
Minority interest, net of tax
|
|
|
48
|
|
|
|
—
|
|
|
|
586
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(666
|
)
|
|
|
17,103
|
|
|
|
12,315
|
|
|
|
33,773
|
|
Dividends on preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,066
|
)
|
Preferred stock accretion
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(12,193
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(666
|
)
|
|
$
|
17,103
|
|
|
$
|
12,315
|
|
|
$
|
18,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02
|
)
|
|
$
|
0.62
|
|
|
$
|
0.43
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.02
|
)
|
|
$
|
0.59
|
|
|
$
|
0.42
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
29,000,514
|
|
|
|
27,793,003
|
|
|
|
28,746,188
|
|
|
|
15,701,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
29,000,514
|
|
|
|
29,125,372
|
|
|
|
29,639,974
|
|
|
|
16,850,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K12 INC.
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
2009
|
|
2008
|
|
2007
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,315
|
|
|
$
|
33,773
|
|
|
$
|
3,865
|
|
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
20,835
|
|
|
|
12,568
|
|
|
|
7,404
|
|
Stock based compensation expense
|
|
|
2,790
|
|
|
|
1,464
|
|
|
|
218
|
|
Excess tax benefit from stock-based compensation
|
|
|
(6,998
|
)
|
|
|
—
|
|
|
|
—
|
|
Deferred income taxes
|
|
|
9,584
|
|
|
|
(21,093
|
)
|
|
|
—
|
|
Provision for (reduction of) doubtful accounts
|
|
|
97
|
|
|
|
867
|
|
|
|
(852
|
)
|
Provision for inventory obsolescence
|
|
|
149
|
|
|
|
407
|
|
|
|
95
|
|
Provision for (reduction of) student computer shrinkage and
obsolescence
|
|
|
243
|
|
|
|
162
|
|
|
|
(48
|
)
|
Impairment of capitalized curriculum development cost
|
|
|
261
|
|
|
|
—
|
|
|
|
—
|
|
Minority interest, net of tax
|
|
|
(586
|
)
|
|
|
—
|
|
|
|
—
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(21,999
|
)
|
|
|
(15,322
|
)
|
|
|
(3,154
|
)
|
Inventories
|
|
|
(11,529
|
)
|
|
|
(7,275
|
)
|
|
|
(2,790
|
)
|
Prepaid expenses
|
|
|
(4,162
|
)
|
|
|
(2,403
|
)
|
|
|
(763
|
)
|
Other current assets
|
|
|
(3,226
|
)
|
|
|
47
|
|
|
|
(255
|
)
|
Deposits and other assets
|
|
|
(1,828
|
)
|
|
|
(104
|
)
|
|
|
(322
|
)
|
Accounts payable
|
|
|
(4,022
|
)
|
|
|
7,375
|
|
|
|
579
|
|
Accrued liabilities
|
|
|
2,645
|
|
|
|
1,557
|
|
|
|
(824
|
)
|
Accrued compensation and benefits
|
|
|
(1,758
|
)
|
|
|
3,828
|
|
|
|
1,100
|
|
Deferred revenue
|
|
|
275
|
|
|
|
(273
|
)
|
|
|
1,224
|
|
Deferred rent
|
|
|
59
|
|
|
|
(44
|
)
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities
|
|
|
(6,855
|
)
|
|
|
15,534
|
|
|
|
5,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(13,939
|
)
|
|
|
(6,476
|
)
|
|
|
(5,366
|
)
|
Purchase of domain name
|
|
|
(16
|
)
|
|
|
(250
|
)
|
|
|
—
|
|
Cash (invested in) released from restricted cash and cash equivalents
|
|
|
(2,500
|
)
|
|
|
—
|
|
|
|
2,332
|
|
Acquisition of Power-Glide
|
|
|
—
|
|
|
|
(119
|
)
|
|
|
—
|
|
Capitalized curriculum development costs
|
|
|
(13,931
|
)
|
|
|
(11,669
|
)
|
|
|
(8,683
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(30,386
|
)
|
|
|
(18,514
|
)
|
|
|
(11,717
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash received from issuance of common stock, net of underwriters
commission
|
|
|
—
|
|
|
|
74,493
|
|
|
|
—
|
|
Cash received from issuance of common stock — Regulation S
transaction
|
|
|
—
|
|
|
|
15,000
|
|
|
|
—
|
|
Deferred initial public offering costs
|
|
|
—
|
|
|
|
(3,954
|
)
|
|
|
—
|
|
Net (repayments on) borrowings from revolving credit facility
|
|
|
—
|
|
|
|
(1,500
|
)
|
|
|
1,500
|
|
Repayments on notes payable — related party
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,025
|
)
|
Repayments on capital lease obligations
|
|
|
(9,133
|
)
|
|
|
(4,767
|
)
|
|
|
(1,384
|
)
|
Repayments on notes payable
|
|
|
(804
|
)
|
|
|
(180
|
)
|
|
|
(62
|
)
|
Proceeds from notes payable
|
|
|
3,135
|
|
|
|
408
|
|
|
|
441
|
|
Proceeds from minority interest contribution
|
|
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
Proceeds from exercise of stock options
|
|
|
9,824
|
|
|
|
1,485
|
|
|
|
292
|
|
Excess tax benefit from stock based compensation
|
|
|
6,998
|
|
|
|
—
|
|
|
|
—
|
|
Payment of cash dividend — Preferred Stock
|
|
|
—
|
|
|
|
(6,406
|
)
|
|
|
—
|
|
Bank overdraft
|
|
|
—
|
|
|
|
(1,577
|
)
|
|
|
1,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
15,020
|
|
|
|
73,002
|
|
|
|
(1,661
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(22,221
|
)
|
|
|
70,022
|
|
|
|
(7,815
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
71,682
|
|
|
|
1,660
|
|
|
|
9,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
49,461
|
|
|
$
|
71,682
|
|
|
$
|
1,660
|
|
Non-GAAP Financial Measures
EBITDA
EBITDA consists of net income (loss) minus interest income, minus income
tax benefit, minus minority interest benefit, plus interest expense,
plus income tax expense, plus minority interest expense and plus
depreciation and amortization. Interest income consists primarily of
interest earned on short-term investments or cash deposits. Interest
expense consists primarily of interest expense for capital leases,
long-term and short-term borrowings. We use EBITDA as a measure of
operating performance. However, EBITDA is not a recognized measurement
under U.S. generally accepted accounting principles, or GAAP, and when
analyzing our operating performance, investors should use EBITDA in
addition to, and not as an alternative for, net income (loss) as
determined in accordance with GAAP. Because not all companies use
identical calculations, our presentation of EBITDA may not be comparable
to similarly titled measures of other companies. Furthermore, EBITDA is
not intended to be a measure of free cash flow for our management’s
discretionary use, as it does not consider certain cash requirements
such as tax payments.
We believe EBITDA is useful to an investor in evaluating our operating
performance because it is widely used to measure a company’s operating
performance without regard to items such as depreciation and
amortization, which can vary depending upon accounting methods and the
book value of assets, and to present a meaningful measure of corporate
performance exclusive of our capital structure and the method by which
assets were acquired. Our management uses EBITDA as a measurement of
operating performance, because it assists us in comparing our
performance on a consistent basis, as it removes depreciation,
amortization, interest and taxes. We also use EBITDA in presentations to
the members of our board of directors to enable our board to have the
same measurement basis of operating performance as is used by management
to compare our current operating results with corresponding prior
periods and with the results of other companies in our industry.
The following table provides a reconciliation of net income (loss) to
EBITDA including minority interest
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
2009
|
|
2008
|
|
|
|
2009
|
|
2008
|
Net income (loss)
|
|
$
|
(666
|
)
|
|
$
|
17,103
|
|
|
|
|
$
|
12,315
|
|
|
$
|
33,773
|
|
Interest expense (income), net
|
|
|
464
|
|
|
|
(88
|
)
|
|
|
|
|
982
|
|
|
|
295
|
|
Income tax expense (benefit), net
|
|
|
(13
|
)
|
|
|
(17,735
|
)
|
|
|
|
|
9,628
|
|
|
|
(21,058
|
)
|
Minority interest, net of tax
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
|
|
(586
|
)
|
|
|
-
|
|
Depreciation and amortization
|
|
|
5,921
|
|
|
|
3,709
|
|
|
|
|
|
20,835
|
|
|
|
12,568
|
|
EBITDA
|
|
$
|
5,658
|
|
|
$
|
2,989
|
|
|
|
|
$
|
43,174
|
|
|
$
|
25,578
|
|
Pro Forma Net Income (Loss) per Share
On December 18, 2007, the Company completed an initial public offering
in which it sold 4,450,000 shares of common stock. Concurrently with the
completion of the offering was the automatic conversion of outstanding
preferred shares into 19,879,675 common shares. Also concurrent with the
IPO, the Company paid dividends of $6.4 million on its Series C
preferred stock. The Company has provided pro forma net income (loss)
per basic and diluted share for the three months and year ended June 30,
2008 in this release, in addition to providing financial results in
accordance with GAAP. The pro forma net income (loss) per basic and
diluted share reflects the following for all periods presented:
(i) weighted average effect of the IPO shares, (ii) elimination of
preferred stock dividends, (iii) elimination of preferred stock
accretion, (iv) conversion of the preferred shares to common shares as
of the beginning of the period, and (v) elimination of the income tax
benefit from the reversal of the deferred tax asset valuation allowance.
The Company believes pro forma income (loss) per basic and diluted share
provides useful information to investors by reflecting income (loss) per
share on a more representative basis with future operations.
The following table provides a reconciliation of pro forma net income
(loss) per share to the Company’s actual results under GAAP for the
three months and year ended June 30, 2008 as follows:
|
|
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
Three Months ended
|
|
Year ended
|
|
|
June 30, 2008
|
|
June 30, 2008
|
|
|
As Reported
|
|
Adjustments
|
|
Pro forma
|
|
As Reported
|
|
Adjustments
|
|
Pro forma
|
Income (loss) before income tax expense
|
|
$
|
(632
|
)
|
|
|
$
|
—
|
|
|
$
|
(632
|
)
|
|
|
$
|
12,715
|
|
|
$
|
—
|
|
|
|
$
|
12,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense), net
|
|
|
17,735
|
|
|
|
|
(17,302
|
)
|
|
|
433
|
|
|
|
|
21,058
|
|
|
|
(26,986
|
)
|
|
|
|
(5,928
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
17,103
|
|
|
|
|
(17,302
|
)
|
|
|
(199
|
)
|
|
|
|
33,773
|
|
|
|
(26,986
|
)
|
|
|
|
6,787
|
|
Less preferred stock accretion
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
12,193
|
|
|
|
(12,193
|
)
|
|
|
|
—
|
|
Less preferred stock dividends
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3,066
|
|
|
|
(3,066
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders
|
|
$
|
17,103
|
|
|
|
$
|
(17,302
|
)
|
|
$
|
(199
|
)
|
|
|
$
|
18,514
|
|
|
$
|
(11,727
|
)
|
|
|
$
|
6,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.62
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
1.18
|
|
|
|
|
$
|
0.27
|
|
Diluted
|
|
$
|
0.59
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
1.10
|
|
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
27,793,003
|
|
|
|
|
|
|
|
27,793,003
|
|
|
|
|
15,701,278
|
|
|
|
9,288,045
|
|
|
|
|
24,989,323
|
|
Diluted
|
|
|
29,125,372
|
|
|
|
|
|
|
|
27,793,003
|
|
|
|
|
16,850,909
|
|
|
|
9,288,045
|
|
|
|
|
26,138,954
|
|
About K12
K12 Inc. (NYSE: LRN) is a leading provider of proprietary,
technology-based curriculum and online education programs to students in
grades K-12. K12 provides its curriculum and academic
services to online schools, traditional classrooms, blended school
programs, and directly to families. K12 Inc. also operates the K12International Academy, an accredited, diploma-granting online private
school serving students worldwide.
K12's mission is to provide any child the curriculum and
tools to maximize success in life, regardless of geographic, financial,
or demographic circumstances. K12 Inc. is accredited through the
Commission on International Trans-Regional Accreditation (CITA), which
recently joined AdvancED, the world's largest education community. K12
is the largest national K-12 online school provider to be recognized by
CITA. More information can be found at www.K12.com.
K12(R) is a registered trademark and the K12 logo,
xPotential and Unleash the xPotential are trademarks of K12 Inc.
Source: K12 Inc.
K12 Inc.
Investor:
Keith Haas, 703-483-7077
SVP,
Finance and Investor Relations
khaas@k12.com
or
Press:
Jeff
Kwitowski, 703-483-7281
VP, Public Relations
jkwitowski@k12.com