K12 Inc. Reports Third Quarter Fiscal 2016 with Revenue of $221.3 Million

April 27, 2016 07:00 ET

| Source: K12 Inc.

HERNDON, Va., April 27, 2016 (GLOBE NEWSWIRE) — K12 Inc. (NYSE:LRN), a technology-based education company and leading provider of proprietary curriculum and online school programs for students in pre-K through high school, today announced its results for the third fiscal quarter ended March 31, 2016.

Financial Highlights for the Three Months Ended March 31, 2016 (Third Quarter Fiscal Year 2016)

  • Revenues of $221.3 million, compared to $244.6 million in the third quarter of FY 2015.
  • EBITDA, a non-GAAP measure (see reconciliation below), of $36.7 million, compared to $45.2 million in the third quarter of FY 2015.
  • Operating income of $19.1 million, compared to $27.4 million in the third quarter of FY 2015.
  • Net income attributable to common stockholders of $14.3 million, compared to $17.0 million in the third quarter of FY 2015. 
  • Diluted net income attributable to common stockholders per share of $0.37, compared to $0.45 in the third quarter of FY 2015. 

Financial Highlights for the Nine Months Ended March 31, 2016

  • Revenues of $651.4 million, compared to $712.6 million for the first nine months of FY 2015.
  • EBITDA, a non-GAAP measure (see reconciliation below), of $64.0 million, compared to $87.0 million for the first nine months of FY 2015.
  • Operating income of $13.4 million compared to $34.7 million for the first nine months of FY 2015.
  • Net income attributable to common stockholders of $10.0 million, compared to $22.6 million for the first nine months of FY 2015.
  • Diluted net income attributable to common stockholders per share of $0.26, compared to $0.60 for the first nine months of FY 2015.

Changes to the year-over-year financial results, for the three and nine months ended March 31, 2016, are primarily due to the transition of the Agora Cyber Charter School contract from a managed to a non-managed program.

Comments from Management                         

“We continue to achieve financial results in line with the guidance we provided for the year,” said Stuart Udell, Chief Executive Officer. “I am also extremely proud of this year’s academic accomplishments and the extraordinary efforts of our dedicated teachers and school teams.  While we have made great strides in the last few years, we will continue to work with our partners to further improve the academic outcomes for all the students we serve,” added Udell.

Cash, Capital Expenditures and Capital Leases

As of March 31, 2016, the Company had cash and cash equivalents of $199.5 million, an increase of $3.6 million compared to the $195.9 million reported at June 30, 2015. This increase is largely the result of normal seasonal trends.

Capital expenditures for the nine months ended March 31, 2016 were $41.0 million, a decrease of $4.3 million from the prior year’s first nine months, and was comprised of:

  • $2.5 million for property and equipment,
  • $26.3 million for capitalized software development, and
  • $12.2 million for capitalized curriculum.

Capital leases financed additional purchases of $6.9 million during the nine months ended March 31, 2016, primarily for student computers.  This compares to capital leases financed during the nine months ended March 31, 2015 of $12.1 million.

Revenue

The following table sets forth the Company’s revenues — Managed Public School Programs (curriculum and services sold to managed public schools), Institutional (curriculum, technology and services provided to school districts, public schools and other educational institutions that the Company does not manage), and Private Pay Schools and Other (private schools for which the Company charges student tuition and makes direct consumer sales) – for the periods indicated.

Beginning in fiscal 2016, the Company has presented revenue from Non-managed Programs as part of the Institutional line of business, along with the Institutional Software and Services, which together constitute total Institutional revenue.  In the prior year these revenues were presented as part of the Public School Programs line of business, which included both Managed and Non-managed Public School Programs. We believe this revised presentation clarifies and better aligns the disclosure of Non-Managed Program revenues with the Company’s operational and sales structure.

  Three Months Ended   Change   Nine Months Ended   Change
  March 31,   2016 / 2015   March 31,   2016 / 2015
($ in thousands)   2016     2015       $   %     2016     2015       $   %
Managed Public School Programs (1) $ 185,832   $ 213,230     $ (27,398 )   -12.8 %   $ 533,633   $ 612,344     $ (78,711 )   -12.9 %
Institutional                      
Non-managed Public School Programs (1)   13,145     9,324       3,821     41.0 %     44,441     31,009       13,432     43.3 %
Institutional Software & Services   10,645     10,954       (309 )   -2.8 %     36,134     35,670       464     1.3 %
Total Institutional   23,790     20,278       3,512     17.3 %     80,575     66,679       13,896     20.8 %
Private Pay Schools and Other   11,718     11,115       603     5.4 %     37,173     33,617       3,556     10.6 %
Total $ 221,340   $ 244,623     $ (23,283 )   -9.5 %   $ 651,381   $ 712,640     $ (61,259 )   -8.6 %
(1) Managed Programs include schools where K12 provides substantially all of the management, technology and academic support services in addition to curriculum, learning systems and instructional services. Non-managed Programs include schools where K12 provides curriculum and technology, and the school can also contract for instruction or other educational services.  Non-managed programs, however, do not offer primary administrative oversight.

Enrollment Data

The following table sets forth enrollment data for students in Managed Public School Programs and our Non-managed Public School Programs for the periods indicated.  These figures exclude enrollments from classroom pilot programs and consumer programs.

  Three Months EndedMarch 31,   2016 / 2015   Nine Months EndedMarch 31,   2016 / 2015
  2016   2015   Change    Change %   2016   2015   Change    Change %
Managed Public School Programs (1,2) 104,640   115,330     (10,690 )     -9.3 %   104,229   116,198     (11,969 )     -10.3 %
Non-managed Public School Programs (1) 26,816   20,165     6,651       33.0 %   27,326   20,341     6,985       34.3 %
(1) If a school changes from a Managed to a Non-managed program, the corresponding enrollment classification would change in the period in which the contract arrangement changed.
(2) Managed Public School Programs include enrollments for which K12 receives no public funding or revenue.

Revenue per Enrollment Data

The following table sets forth revenue per average enrollment data for students in Public School Programs for the periods indicated.

  Three Months Ended   Change   Nine Months Ended   Change
  March 31,   2016 / 2015   March 31,   2016 / 2015
    2016     2015     $ %     2016     2015     $ %
Managed Public School Programs $ 1,776     $ 1,849     $ (73 )     -3.9 %   $ 5,120     $ 5,270     $ (150 )     -2.8 %
Non-managed Public School Programs   490       462       28       6.0 %     1,626       1,524       102       6.7 %

Fourth Quarter Outlook

The Company is forecasting the following for the fourth quarter of FY 2016:

  • Revenue in the range of $205 million to $215 million.
  • Operating income in the range of $5 million to $9 million.
  • Capital expenditures, which includes curriculum and software development, computers and infrastructure, of $22 million to $27 million.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve sufficient levels of new enrollments to sustain or to grow our business model; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; declines or variations in academic performance outcomes as curriculum and testing standards evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and in any school in which we operate; legal and regulatory challenges from opponents of virtual public education, public charter schools or for-profit education companies; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement  of our intellectual property; non-compliance with laws and regulations related to operating schools in a foreign jurisdiction; entry of new competitors with superior competitive technologies and lower prices; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of April 27, 2016, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Conference Call

The Company will discuss its third quarter fiscal year 2016 financial results during a conference call scheduled for Wednesday, April 27, 2016 at 8:30 a.m. eastern time (ET).

The conference call will be webcast and available at http://public.viavid.com/index.php?id=119013.  Please access the web site at least 15 minutes prior to the start of the call.

To participate in the live call, investors and analysts should dial (877) 407-4019 (domestic) or (201) 689-8337 (international) at 8:15 a.m. (ET). No passcode is required. 

A replay of the call will be available starting on April 27, 2016 at 11:00 a.m. ET through May 27, 2016 at 11:00 a.m. ET, at (877) 660-6853 (domestic) or (201) 612-7415 (international) using conference ID 13634573. A webcast replay of the call will be available at http://public.viavid.com/index.php?id=119013 for 30 days.

Financial Statements

The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the three months and nine months ended March 31, 2016, and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended March 31, 2016, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

K12 INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,   June 30,
  2016       2015  
  (In thousands, except share and per share data)
ASSETS      
Current assets      
Cash and cash equivalents $ 199,508     $ 195,852  
Accounts receivable, net of allowance of $9,949 and $9,657 at March 31, 2016 and June 30, 2015, respectively   222,884       188,246  
Inventories, net   16,146       29,571  
Deferred tax asset   8,406       8,989  
Prepaid expenses   16,837       11,428  
Other current assets   24,797       24,877  
Total current assets   488,578       458,963  
Property and equipment, net   26,717       34,407  
Capitalized software, net   67,710       62,683  
Capitalized curriculum development costs, net   58,345       58,696  
Intangible assets, net   19,347       21,195  
Goodwill   66,160       66,160  
Deposits and other assets   7,049       6,495  
Total assets $ 733,906     $ 708,599  
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY              
Current liabilities      
Current portion of capital lease obligations $ 13,453     $ 16,635  
Accounts payable   15,745       29,819  
Accrued liabilities   14,209       12,486  
Accrued compensation and benefits   26,898       26,790  
Deferred revenue   50,898       24,927  
Total current liabilities   121,203       110,657  
Capital lease obligations, net of current portion   9,660       13,022  
Deferred rent, net of current portion   6,958       7,692  
Deferred tax liability   27,654       22,456  
Other long-term liabilities   6,475       8,233  
Total liabilities   171,950       162,060  
Commitments and contingencies          
Redeemable noncontrolling interest   9,801       9,601  
Stockholders’ equity              
Common stock, par value $0.0001; 100,000,000 shares authorized; 42,593,095 and 41,837,894 shares issued and 39,090,497 and 38,335,296 shares outstanding at March 31, 2016 and June 30, 2015, respectively   4       4  
Additional paid-in capital   668,238       663,461  
Accumulated other comprehensive loss   (643 )     (1,065 )
Accumulated deficit   (40,444 )     (50,462 )
Treasury stock of 3,502,598 shares at cost at March 31, 2016 and June 30, 2015   (75,000 )     (75,000 )
Total stockholders’ equity   552,155       536,938  
Total liabilities, redeemable noncontrolling interest and equity $ 733,906     $ 708,599  
K12 INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended   Nine Months Ended
  March 31,   March 31,
  2016       2015       2016       2015  
  (In thousands, except share and per share data)
Revenues $ 221,340     $ 244,623     $ 651,381     $ 712,640  
Cost and expenses                              
Instructional costs and services   134,755       148,985       403,374       440,857  
Selling, administrative, and other operating expenses   64,888       64,871       225,598       226,972  
Product development expenses   2,563       3,337       9,004       10,065  
Total costs and expenses   202,206       217,193       637,976       677,894  
Income from operations   19,134       27,430       13,405       34,746  
Interest expense, net   (101 )     (315 )     (596 )     (134 )
Income before income tax expense and noncontrolling interest   19,033       27,115       12,809       34,612  
Income tax expense   (5,368 )     (10,586 )     (3,924 )     (12,711 )
Net income   13,665       16,529       8,885       21,901  
Adjust net loss attributable to noncontrolling interest   608       484       1,133       667  
Net income attributable to common stockholders $ 14,273     $ 17,013     $ 10,018     $ 22,568  
Net income attributable to common stockholders per share                              
Basic $ 0.38     $ 0.46     $ 0.27     $ 0.60  
Diluted $ 0.37     $ 0.45     $ 0.26     $ 0.60  
Weighted average shares used in computing per share amounts:                              
Basic   37,692,826       37,211,634       37,562,106       37,334,598  
Diluted   38,999,871       37,408,911       38,559,204       37,574,665  
K12 INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31,
    2016       2015  
  (In thousands)
Cash flows from operating activities      
Net income $ 8,885     $ 21,901  
Adjustments to reconcile net income to net cash provided by operating activities              
Depreciation and amortization expense   50,622       52,273  
Stock-based compensation expense   13,759       13,471  
Excess tax benefit from stock-based compensation   (6 )     (8 )
Deferred income taxes   (552 )     4,128  
Provision for doubtful accounts   2,895       1,442  
Provision for excess and obsolete inventory   543       541  
Benefit for student computer shrinkage and obsolescence   (422 )     (262 )
Expensed leased computer peripherals   2,532        
Changes in assets and liabilities:              
Accounts receivable   (37,521 )     (81,421 )
Inventories   12,882       15,532  
Prepaid expenses   (5,409 )     (4,226 )
Other current assets   79       (3,719 )
Deposits and other assets   (159 )     (425 )
Accounts payable   (14,074 )     (10,979 )
Accrued liabilities   3,483       (1,974 )
Accrued compensation and benefits   110       4,619  
Deferred revenue   25,971       32,336  
Deferred rent and other liabilities   (2,496 )     2,510  
Net cash provided by operating activities   61,122       45,739  
Cash flows from investing activities              
Purchase of property and equipment   (2,458 )     (7,656 )
Capitalized software development costs   (26,321 )     (25,430 )
Capitalized curriculum development costs   (12,206 )     (12,194 )
Investment in LearnBop, Inc.         (6,512 )
Net cash used in investing activities   (40,985 )     (51,792 )
Cash flows from financing activities              
Repayments on capital lease obligations   (13,428 )     (16,743 )
Purchase of treasury stock         (26,452 )
Proceeds from exercise of stock options   14       513  
Excess tax benefit from stock-based compensation   6       8  
Retirement of restricted stock for income tax withholding   (3,056 )     (2,388 )
Net cash used in financing activities   (16,464 )     (45,062 )
Effect of foreign exchange rate changes on cash and cash equivalents   (17 )     (2,144 )
Net change in cash and cash equivalents   3,656       (53,259 )
Cash and cash equivalents, beginning of period   195,852       196,109  
Cash and cash equivalents, end of period $ 199,508     $ 142,850  

Non-GAAP Financial Measures

EBITDA

EBITDA consists of net income plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest. Interest expense primarily consists of interest expense for capital leases. We use EBITDA in addition to income from operations and net income 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 as determined in accordance with GAAP. Not all companies use identical calculations for EBITDA, therefore 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 capital expenditures, tax payments, interest payments, or other working capital.

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 an additional measurement of operating performance because it assists us in comparing our performance on a consistent basis; and
  • 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 tables provide a reconciliation of net income to EBITDA:

  Three Months Ended March 31,   Nine Months Ended December 31,
    2016     2015       2016     2015  
    (In thousands)   (In thousands)
Net income — K12 Inc.    $   14,273   $   17,013     $   10,018   $   22,568  
Interest expense (income), net        101       315         596       134  
Income tax expense       5,368       10,586         3,924       12,711  
Depreciation and amortization        17,586       17,764         50,622       52,273  
Noncontrolling interest        (608 )     (484 )       (1,133 )     (667 )
EBITDA    $   36,720   $   45,194     $   64,027   $   87,019  

About K12 Inc.

K12 Inc. (NYSE:LRN) is driving innovation and advancing the quality of education by delivering state-of-the-art, digital learning platforms and technology to students and school districts across the globe. K12’s award winning curriculum serves over 2,000 schools and school districts and has delivered more than four million courses over the past decade. K12 is a company of educators with the nation’s largest network of K-12 online school teachers, providing instruction, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and directly to families. The K12 program is offered through K12 partner public schools in 33 states and the District of Columbia, and through school districts and public and private schools serving students in all 50 states and more than 100 countries.  More information can be found at K12.com.

K12 Inc.
Investor Contact:
Mike Kraft, 571-353-7778
VP Finance & Corporate Treasurer
mkraft@k12.com

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K12 Inc. Reports Financial Guidance for Full Year and First Quarter of Fiscal 2016


By GlobeNewswire,  October 14, 2015, 07:15:00 AM EDT



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HERNDON, Va., Oct. 14, 2015 (GLOBE NEWSWIRE) — K12 Inc. (NYSE:LRN), a technology-based education company and leading provider of proprietary curriculum and online school programs for students in pre-K through high school, today announced guidance for the full fiscal year ending June 30, 2016 (“FY 2016″) and the first fiscal quarter of 2016.

Fiscal Year 2016 Outlook

  • Revenues of $830 million to $865 million, compared to $948.3 million for the full fiscal year of 2015. The year over year decline is largely due to the Agora Cyber School shifting from a managed to non-managed program. The net impact of this transition is approximately $110 million for the year.
  • Operating income of $17 million to $23 million, compared to $18.4 million for the full fiscal year of 2015.
  • Capital expenditures, defined as curriculum development, software development, purchases of property and equipment and capitalized leases for student computers, of $70 million to $80 million, compared to $76.5 million for the full fiscal year of 2015.
  • Effective income tax rate of 39% to 41%.

First Quarter Fiscal Year 2016 Outlook

  • Revenues of $218 million to $222 million, compared to $236.7 million in the first quarter of FY 2015. The year over year decline is largely due to the Agora Cyber School shifting from a managed to non-managed program. The net impact of this transition for the first quarter is approximately $25 million.
  • Operating loss of $20 million to $22 million, compared to an operating loss of $13.2 million in the first quarter of FY 2015. Operating losses in the first quarter relate to the seasonality of SG&A costs at the beginning of every school year, which includes enrollment center and promotional expenses.
  • Capital expenditures, defined as curriculum development, software development, purchases of property and equipment and capitalized leases for student computers, of $15 million to $17 million, compared to $22.9 million in the first quarter of FY 2015.

The following table provides detail on student enrollments in Public School Programs as of the October count date. Public School Programs include both virtual and blended schools where a district or independent board has contracted with K12 to provide a full-time program of educational products and services. Enrollments are classified into Managed Programs and Non-managed Programs. Managed Programs include schools where K12 provides substantially all of the management, technology and academic support services in addition to curriculum, learning systems and instructional services. Non-managed Programs include schools where K12 provides curriculum and technology, and the school can also contract for instruction or other educational services. Non-managed programs, however, do not offer primary administrative oversight.

         
  Three Months Ended September 30, 2015 / 2014
   2015   2014  Change Change %
         
Managed Public School Programs (1,2,3)  104,429  118,609  (14,180) -12.0%
Non-managed Public School Programs (1,3)  27,754  20,630  7,124 34.5%

(1) If a school changes from a Managed to a Non-managed program, the corresponding enrollment classification would change in the period in which the contract arrangement changed.
(2) Public School Programs include enrollments for which K12 receives no public funding or revenue.
(3) Public School Program enrollments are equal to the official count date number, which is the first Wednesday of October in a year, or October 7, 2015 for Q1 FY16 and October 1, 2014 for Q1 FY15.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve sufficient levels of new enrollments to sustain or to grow our business model; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; declines or variations in academic performance outcomes as curriculum and testing standards evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and in any school in which we operate; legal and regulatory challenges from opponents of virtual public education, public charter schools or for-profit education companies; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement of our intellectual property; non-compliance with laws and regulations related to operating schools in a foreign jurisdiction; entry of new competitors with superior competitive technologies and lower prices; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of October 14, 2015, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Conference Call

The Company will discuss its guidance for fiscal year 2015 financial results during a conference call scheduled for Wednesday, October 14, 2015 at 8:30 a.m. eastern time (ET).

A live webcast of the call will be available at http://public.viavid.com/index.php?id=116570. To participate in the live call, investors and analysts should dial (877) 407-4019 (domestic) or (201) 689-8337 (international) at 8:15 a.m. (ET). No passcode is required.

A replay of the call will be available starting on October 14, 2015 at 11:00 a.m. ET through November 14, 2015 at 11:00 a.m. ET, at (877) 660-6853 (domestic) or (201) 612-7415 (international) using conference ID 13622167. A webcast replay of the call will be available at http://public.viavid.com/index.php?id=116570 for 30 days.

About K12 Inc.

K12 Inc. (NYSE:LRN) is driving innovation and advancing the quality of education by delivering state-of-the-art, digital learning platforms and technology to students and school districts across the globe. K12’s award winning curriculum serves over 2,000 schools and school districts and has delivered more than four million courses over the past decade. K12 is a company of educators with the nation’s largest network of K-12 online school teachers, providing instruction, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and directly to families. The K12 program is offered through K12 partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

CONTACT: K12 Inc.
         Investor Contact:
         Mike Kraft, 571-353-7778
         VP Finance & Corporate Treasurer
         mkraft@k12.com
         or
         Press Contact:
         Frank Giancamilli, 703-483-1529
         Senior Manager Corporate Communicationsfgiancamilli@k12.com


Source: K12 Inc.

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K12 Inc. Reports Profitable Second Quarter of $12.3M

Image via K12

Herndon, Virginia-based K12 Inc. held its second quarter earnings conference call Thursday morning, reporting a profitable quarter after suffering a loss in the same period a year ago.

The edtech company provided proprietary curriculum, software systems and educational services to support individualized learning for students in pre-K through high school. The company had quarterly net income of $12.3 million, or 33 cents per share. At the same time a year ago K12 lost $3.7 million, or nine cents per share.

Fiscal second quarter revenue reached $231.3 million, according to K12, which is up from $223.9 million in the second quarter of FY 2014.

K12 stocks went up after the earnings release, which is likely because the results exceeded Wall Street expectations. Zacks Investment Research predicted that the average estimate for earnings would be 29 cents per share and that revenue would come in at $229.8 million. That said, its stock lost more than 40 percent of its value over the course of the last year.

Still, the second quarter earnings report was a promising one. Total enrollment increased by 0.9 percent and revenue was up 3.2 percent. K12 expects full-year revenue to come in between $230 million to $240 million.

“The academic progress of our students and successes of our managed public schools continue to drive K12 forward,” said Chairman and CEO Nate Davis. “After years of focused investment coupled with an unrivaled commitment to putting students first, we are beginning to see improvement in student proficiency on State academic assessments. The K12 team remains passionate about supporting students, teachers and our partner schools to continue this trend toward academic excellence.”

Take a look at the full results for the second financial quarter that ended December 31, 2014 here.

Stocks Under Consideration-Select Income REIT(SIR), Campus Crest Communities (CCG), K12 Inc. (LRN), Net Element International (NETE) | Techsonian

K12 Inc. (NYSE:LRN) is pleased to announced its financial position that during fiscal year 2014, the Company sold certain businesses which, in aggregate, were responsible for $16.9 million in revenue for the full year and were close to breakeven for the year. Excluding the impact of these businesses, revenue for the first quarter of FY 2014 would have been $224.9 million.

K12 Inc. (NYSE:LRN)decreased -0.90% to close at $12.14 in the last trading session and its total traded volume was 729,478 shares versus average volume of 505,282. The company has market cap of $470.99 million.

K12 Inc. Reports Second Quarter Fiscal 2014 With Revenue of $223.9 Million – MarketWatch

press release

Feb. 4, 2014, 6:30 a.m. EST

K12 Inc. Reports Second Quarter Fiscal 2014 With Revenue of $223.9 Million

HERNDON, Va., Feb 04, 2014 (GLOBE NEWSWIRE via COMTEX) –K12 Inc. LRN -4.83% , a technology-based education company and leading provider of proprietary curriculum and online school programs for students in pre-K through high school, today announced its results for the second fiscal quarter ended December 31, 2013. Financial measures are provided on a GAAP basis, followed by a summary of results excluding the impact of specific charges which had a significant impact on second quarter results.

Financial Highlights for the Three Months Ended December 31, 2013 (Second Quarter Fiscal Year 2014)

– Revenues for the second quarter of FY 2014 increased 8.7% from the prior year to $223.9 million.

– EBITDA, a non-GAAP measure (see reconciliation below), for the second quarter of FY 2014 was $25.6 million, compared to $32.5 million from the second quarter of FY 2013.

– Operating loss of $8.9 million compared to operating income of $16.3 million in the second quarter of FY 2013.

– Net loss attributable to common stockholders of $3.7 million, compared to net income of $9.5 million from second quarter of FY 2013.

– Diluted net loss attributable to common stockholders per share was $0.09.

During the quarter ended December 31, 2013, the Company incurred the following charges, totaling $32.2 million including $4.4 million in cash charges.

– Additional reserve for excess inventory and accelerated depreciation on software, products and computer hardware of $18.6 million.

– Accelerated amortization of trade names in our Institutional business of $5.2 million.

– Severance costs associated with the departure of Ron Packard, K12’s former CEO, and a modest workforce reduction enacted primarily at K12 headquarters, collectively $7.4 million.

– The Company announced its intent to form a new company which K12 will contribute assets and its partners will contribute cash. Other charges and expenses of $1.0 million included costs related to the formation of this new company.

Excluding the impact of the aforementioned charges, for the three months ended December 31, 2013 (see additional tables below).

EBITDA would have increased to $40.2 million, a 23.7% increase compared to the $32.5 million from the second quarter of FY 2013.

– Operating income would have increased to $23.3 million, a 42.9% increase compared to operating income of $16.3 million in the second quarter of FY 2013.

– Net income attributable to common and Series A stockholders would have increased to $14.3 million, a 50.5% increase compared to net income of $9.5 million in the second quarter of FY 2013.

– Diluted net income attributable to common stockholders per share would have increased to $0.36 as compared to the $0.24 in the prior year.

Financial Highlights for the Six Months Ended December 31, 2013

– Revenues for the six months ended December 31, 2013 increased 5.9% to $452.3 million.

– EBITDA, a non-GAAP measure (see reconciliation below), was $34.1 million, compared to $56.8 million from the first six months of FY 2013.

– Operating loss of $17.4 million compared to operating income of $24.9 million for the first six months of FY 2013.

– Net loss attributable to common and Series A stockholders of $8.7 million, compared to net income of $13.9 million for the first six months of FY 2013.

– Diluted net loss attributable to common stockholders per share was $0.22, which includes the pro rata effect of the Series A Special shares conversion to commons shares on September 3, 2013.

Excluding the impact of the aforementioned charges, for the six months ended December 31, 2013

EBITDA would have been $48.6 million compared to $56.8 million for the first six months of FY 2013.

– Operating income would have been $14.9 million compared to operating income of $24.9 million for the first six months of FY 2013.

– Net income attributable to common and Series A stockholders would have been $9.2 million compared to net income of $13.9 million for the first six months of FY 2013.

– Diluted net income attributable to common stockholders per share would have been $0.24, which includes the pro rata effect of the Series A Special shares conversion to common shares on September 3, 2013.

Comments from Management

“We continue to be focused on our primary mission to provide an individualized and effective educational experience for our students,” said Nate Davis, Chairman and Chief Executive Officer. “This quarter we continued to invest in new content, programs, and infrastructure while improving internal operating efficiency. Our Managed Schools are now in the middle of the school year using many of the new educational programs we put in place this year which we believe will improve educational outcomes for all engaged families,” added Davis.

Cash, Capital Expenditures and Capital Leases

As of December 31, 2013, the Company had cash and cash equivalents of $162.9 million, a decrease of $18.6 million from the $181.5 million reported at June 30, 2013.

Capital expenditures for the six months ended December 31, 2013 were $23.5 million, a decrease of $2.3 million from the prior year’s first six months, and was comprised of:

– $5.3 million for property and equipment,

– $10.6 million for capitalized software development, and

– $7.6 million for capitalized curriculum.

Capital leases financed additional purchases of $17.3 million during the six months ended December 31, 2013, primarily for student computers.

Share Buyback

On November 7, 2013 K12 announced the Board of Directors had authorized the repurchase of up to $75.0 million of the Company’s outstanding common stock. For the three months ended December 31, 2013, the Company repurchased 284,200 shares of its common stock at a weighted average purchase price of $20.72 per share for a total cost of $5.9 million. The Company has $69.1 million remaining available on its share repurchase authorization. Future purchases under this buyback would be dependent upon business and market conditions and other factors.

Revenue and Enrollment Data

Revenue

The following table sets forth the Company’s revenues – Managed Public Schools (turn-key management services provided to public schools), Institutional Sales (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Schools (private schools for which it charges student tuition and makes direct consumer sales) – for the periods indicated:

                                              Three Months Ended December 31, Change 2013 / 2012  Six Months Ended December 31, Change 2013 / 2012        ($ in thousands)                      2013            2012            $         %         2013           2012           $         %        Managed Public Schools                $ 195,265       $ 177,541       $ 17,724  10.0      $ 392,208      $ 365,302      $ 26,906  7.4        Institutional Sales                   16,582          18,089          (1,507)   (8.3)     36,291         40,061         (3,770)   (9.4)        International and Private Pay Schools 12,072          10,398          1,674     16.1      23,786         21,761         2,025     9.3        Total                                 $ 223,919       $ 206,028       $ 17,891  8.7%      $ 452,285      $ 427,124      $ 25,161  5.9%        

Enrollment Data

The following table sets forth average enrollment data for students in Managed Public Schools and total enrollment data for students in the International and Private Pay Schools for the periods indicated. These figures exclude enrollments from classroom pilot programs and consumer programs.

                                              Three Months Ended December 31,                             Six Months Ended December 31,                                              2013           2012           Change         Change %       2013           2012           Change         Change %        Managed Public Schools        Average Student Enrollments *         125,053        119,132        5,921          5.0%           125,927        119,831        6,096          5.1%        International and Private Pay Schools        Total Student Enrollments             4,135          4,403          (268)          (6.1%)         17,419         17,399         20             0.1%        Total Semester Course Enrollments     12,815         12,138         677            5.6%           50,442         48,170         2,272          4.7%        * The Managed Public Schools average student enrollments includes some enrollments for which we may receive no public funding.        

Third Quarter Outlook

The Company is forecasting the following for the third quarter of FY 2014, excluding the impact of closing our agreement to create a new company as announced on January 7, 2014:

– Revenue in the range of $225 million to $235 million.

– Operating income in the range of $23 million to $27 million.

– Capital expenditures, which includes curriculum and software development, computers and infrastructure, of $15 million to $20 million.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: our potential inability to further develop, maintain and enhance our products and brands; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor performance or misconduct by operators in any school in our industry and in any school in which we operate; challenges from virtual public school or hybrid school opponents; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new contracts or renew existing contracts with schools; risks associated with entering into and executing mergers, acquisitions and joint ventures; failure to successfully integrate mergers, acquisitions and joint ventures; inability to recruit, train and retain quality teachers and employees; uncertainty regarding our ability to protect our proprietary technologies; risks of new, changing and competitive technologies; increased competition in our industry; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of February 4, 2014, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Conference Call

The Company will discuss its second quarter FY2014 financial results during a conference call scheduled for Tuesday, February 4, 2014 at 8:30 a.m. eastern time (ET).

The conference call will be webcast and available on the K 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 and analysts should dial (866) 318-8615 (domestic) or (617) 399-5134 at 8:15 a.m. (ET). The participant pass code is 35460461. A replay of the call will be available starting on February 4, 2014 at 12:30 p.m., through March 4, 2014, at (888) 286-8010 (domestic) or (617) 801-6888 (international) pass code 32473353. It will also be archived at www.k12.com in the Investor Relations section for 60 days.

Financial Statements

The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the three months and six months ended December 31, 2013, and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended December 31, 2013, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

        K12 INC.        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                               December 31,            June 30,                                                                                                                                                                                                               2013                    2013                                                                                                                                                                                                               (In thousands, except share and per share data)        ASSETS        Current assets        Cash and cash equivalents                                                                                                                                                                              $ 162,889               $ 181,480        Accounts receivable, net of allowance of $3,082 and $2,560 at December 31, 2013 and June 30, 2013, respectively                                                                                        254,350                 186,459        Inventories, net                                                                                                                                                                                       23,363                  44,395        Current portion of deferred tax asset                                                                                                                                                                  18,571                  11,368        Prepaid expenses                                                                                                                                                                                       9,090                   10,331        Other current assets                                                                                                                                                                                   27,368                  23,916        Total current assets                                                                                                                                                                                   495,631                 457,949        Property and equipment, net                                                                                                                                                                            56,262                  56,142        Capitalized software, net                                                                                                                                                                              42,738                  43,504        Capitalized curriculum development costs, net                                                                                                                                                          61,824                  64,599        Intangible assets, net                                                                                                                                                                                 25,436                  32,139        Goodwill                                                                                                                                                                                               61,571                  61,413        Deposits and other assets                                                                                                                                                                              5,425                   3,150        Total assets                                                                                                                                                                                           $ 748,887               $ 718,896        LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY        Current liabilities        Current portion of capital lease obligations                                                                                                                                                           $ 22,216                $ 19,395        Current portion of note payable                                                                                                                                                                        –                      390        Accounts payable                                                                                                                                                                                       16,538                  21,838        Accrued liabilities                                                                                                                                                                                    14,585                  17,027        Accrued compensation and benefits                                                                                                                                                                      20,541                  21,970        Deferred revenue                                                                                                                                                                                       61,160                  28,567        Total current liabilities                                                                                                                                                                              135,040                 109,187        Capital lease obligations, net of current portion                                                                                                                                                      19,430                  16,107        Deferred rent, net of current portion                                                                                                                                                                  8,796                   8,833        Deferred tax liability                                                                                                                                                                                 33,584                  33,299        Other long-term liabilities                                                                                                                                                                            2,729                   2,512        Total liabilities                                                                                                                                                                                      199,579                 169,938        Commitments and contingencies                                                                                                                                                                          –                      –        Redeemable noncontrolling interest                                                                                                                                                                     15,200                  15,200        Equity:        K12 Inc. stockholders' equity        Common stock, par value $0.0001; 100,000,000 shares authorized; 41,111,074 and 37,440,662 shares issued and 40,826,874 and 37,440,662 outstanding		 at December 31, 2013 and June 30, 2013, respectively 4                       4        Additional paid-in capital                                                                                                                                                                             626,421                 548,390        Series A Special Stock, par value $0.0001; 2,750,000 shares authorized, zero and 2,750,000 issued and outstanding at December 31, 2013 and June 30,		 2013, respectively                                 –                      63,112        Accumulated other comprehensive loss                                                                                                                                                                   (101)                   (294)        Accumulated deficit                                                                                                                                                                                    (89,755)                (81,050)        Treasury stock of 284,200 and zero shares at cost at December 31, 2013 and June 30, 2013, respectively                                                                                                 (5,883)                 –        Total K12 Inc. stockholders' equity                                                                                                                                                                    530,686                 530,162        Noncontrolling interest                                                                                                                                                                                3,422                   3,596        Total equity                                                                                                                                                                                           534,108                 533,758        Total liabilities, redeemable noncontrolling interest and equity                                                                                                                                       $ 748,887               $ 718,896        
                K12 INC.        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                                                         Three Months Ended      Six Months Ended                                                                                                                                                         December 31,            December 31,                                                                                                                                                         2013        2012        2013        2012                                                                                                                                                         (In thousands, except share and per share data)        Revenues                                                                                                                                         $ 223,919   $ 206,028   $ 452,285   $ 427,124        Cost and expenses        Instructional costs and services                                                                                                                 153,672     122,799     286,574     241,446        Selling, administrative, and other operating expenses                                                                                            75,753      61,379      173,996     150,998        Product development expenses                                                                                                                     3,402       5,578       9,086       9,746        Total costs and expenses                                                                                                                         232,827     189,756     469,656     402,190        Income (loss) from operations                                                                                                                    (8,908)     16,272      (17,371)    24,934        Interest expense, net                                                                                                                            (28)        (272)       (112)       (501)        Income (loss) before income tax expense and noncontrolling interest                                                                              (8,936)     16,000      (17,483)    24,433        Income tax (expense) benefit                                                                                                                     4,685       (6,680)     8,135       (10,569)        Net income (loss)                                                                                                                                (4,251)     9,320       (9,348)     13,864        Adjust net loss attributable to noncontrolling interest                                                                                          586         191         643         4        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (3,665)   $ 9,511     $ (8,705)   $ 13,868        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.09)    $ 0.24      $ (0.22)    $ 0.36        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                39,977,228  36,118,519  38,953,671  36,073,885        
                K12 INC.        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                 Six Months Ended December 31,                                                                                                 2013                2012                                                                                                 (In thousands)        Cash flows from operating activities        Net income (loss)                                                                        $ (9,348)           $ 13,864        Adjustments to reconcile net income (loss) to net cash provided by operating activities:        Depreciation and amortization expense                                                    51,474              31,894        Stock-based compensation expense                                                         12,210              5,780        Excess tax benefit from stock-based compensation                                         1,216               (2,532)        Deferred income taxes                                                                    (8,134)             9,482        Provision for doubtful accounts                                                          718                 784        Provision for excess and obsolete inventory                                              4,124               200        Provision (benefit) for student computer shrinkage and obsolescence                      (451)               502        Changes in assets and liabilities:        Accounts receivable                                                                      (68,785)            (63,338)        Inventories                                                                              16,908              8,183        Prepaid expenses                                                                         1,257               (8,630)        Other current assets                                                                     (3,508)             (1,402)        Deposits and other assets                                                                (227)               (217)        Accounts payable                                                                         (5,310)             (3,838)        Accrued liabilities                                                                      (2,484)             8,403        Accrued compensation and benefits                                                        (1,435)             (4,058)        Deferred revenue                                                                         32,149              33,529        Release of restricted cash                                                               –                  1,501        Deferred rent and other long term liabilities                                            178                 1,945        Net cash provided by operating activities                                                20,552              32,052        Cash flows from investing activities        Purchase of property and equipment                                                       (5,329)             (4,524)        Capitalized software development costs                                                   (10,632)            (11,633)        Capitalized curriculum development costs                                                 (7,649)             (9,628)        Mortgage note to managed school partner                                                  (2,100)             –        Net cash used in investing activities                                                    (25,710)            (25,785)        Cash flows from financing activities        Repayments on capital lease obligations                                                  (11,145)            (9,851)        Repayments on note payable                                                               (390)               (785)        Proceeds from exercise of stock options                                                  7,617               607        Excess tax benefit from stock-based compensation                                         (1,217)             2,532        Purchase of treasury stock                                                               (5,883)             –        Repurchase of restricted stock for income tax withholding                                (3,223)             (801)        Net cash used in financing activities                                                    (14,241)            (8,298)        Effect of foreign exchange rate changes on cash and cash equivalents                     808                 571        Net change in cash and cash equivalents                                                  (18,591)            (1,460)        Cash and cash equivalents, beginning of period                                           181,480             144,652        Cash and cash equivalents, end of period                                                 $ 162,889           $ 143,192        

Non-GAAP Financial Measures

EBITDA

EBITDA consists of net income (loss), plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest charges. Interest expense primarily consists of interest expense for capital leases. We use EBITDA in addition to income (loss) from operations and net income (loss) 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. Not all companies use identical calculations for EBITDA, therefore 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 capital expenditures, tax payments, interest payments, or other working capital.

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 an additional measurement of operating performance because it assists us in comparing our performance on a consistent basis;

– 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 tables provide a reconciliation of net income (loss) to EBITDA.

                                      Three Months Ended December 31, Six Months Ended December 31,                                      2013            2012            2013           2012                                      (In thousands)                  (In thousands)        Net income (loss)-K12 Inc.    $ (3,665)       $ 9,511         $ (8,705)      $ 13,868        Interest expense, net         28              272             112            501        Income tax expense (benefit)  (4,685)         6,680           (8,135)        10,569        Depreciation and amortization 34,525          16,235          51,474         31,894        Noncontrolling interest       (586)           (191)           (643)          (4)        EBITDA                        $ 25,617        $ 32,507        $ 34,103       $ 56,828        

Additional Information

The following tables are provided as reference only and are related to the aforementioned $32.2 million charges incurred in the second quarter of FY 2014.

                                                                                                                                                         Three Months Ended December 31,                                                                                                                                                         Reported Results Specific Q2 Charges Results Excluding Charges Reported Results Results Excluding Charges                                                                                                                                                         (In thousands, except share and per share data)                (% of Revenue)        Revenues                                                                                                                                         $ 223,919        $ –                $ 223,919                 100.0%           100.0%        Cost and expenses        Instructional costs and services                                                                                                                 153,672          19,238              134,434                   68.6%            60.0%        Selling, administrative, and other operating expenses                                                                                            75,753           13,009              62,744                    33.8%            28.0%        Product development expenses                                                                                                                     3,402            –                  3,402                     1.5%             1.5%        Total costs and expenses                                                                                                                         232,827          32,247              200,580                   104.0%           89.6%        Income (loss) from operations                                                                                                                    (8,908)          (32,247)            23,339                    (4.0%)           10.4%        Interest expense, net                                                                                                                            (28)             –                  (28)                      (0.0%)           (0.0%)        Income (loss) before income tax expense and noncontrolling interest                                                                              (8,936)          (32,247)            23,311                    (4.0%)           10.4%        Income tax (expense) benefit                                                                                                                     4,685            14,243              (9,558)                   2.1%             (4.3%)        Net income (loss)                                                                                                                                (4,251)          (18,004)            13,753                    (1.9%)           6.1%        Adjust net loss attributable to noncontrolling interest                                                                                          586              –                  586                       0.3%             0.3%        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (3,665)        $ (18,004)          $ 14,339                  (1.6%)           6.4%        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.09)         $ (0.45)            $ 0.36        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                39,977,228       39,977,228          39,977,228                                                                                                                                                         Six Months Ended December 31,                                                                                                                                                         Reported Results Specific Q2 Charges Results Excluding Charges Reported Results Results Excluding Charges                                                                                                                                                         (In thousands, except share and per share data)                (% of Revenue)        Revenues                                                                                                                                         $ 452,285        $ –                $ 452,285                 100.0%           100.0%        Cost and expenses        Instructional costs and services                                                                                                                 286,574          19,238              267,336                   63.4%            59.1%        Selling, administrative, and other operating expenses                                                                                            173,996          13,009              160,987                   38.4%            35.6%        Product development expenses                                                                                                                     9,086            –                  9,086                     2.0%             2.0%        Total costs and expenses                                                                                                                         469,656          32,247              437,409                   103.8%           96.7%        Income (loss) from operations                                                                                                                    (17,371)         (32,247)            14,876                    (3.8%)           3.3%        Interest expense, net                                                                                                                            (112)            –                  (112)                     (0.0%)           (0.0%)        Income (loss) before income tax expense and noncontrolling interest                                                                              (17,483)         (32,247)            14,764                    3.8%             3.3%        Income tax (expense) benefit                                                                                                                     8,135            14,336              (6,201)                   1.8%             (1.4%)        Net income (loss)                                                                                                                                (9,348)          (17,911)            8,563                     2.0%             1.9%        Adjust net loss attributable to noncontrolling interest                                                                                          643              –                  643                       0.1%             0.1%        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (8,705)        $ (17,911)          $ 9,206                   (1.9%)           2.0%        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.22)         $ (0.46)            $ 0.24        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                38,953,671       38,953,671          38,953,671        

About K12 Inc.

K12 Inc. LRN -4.83% is leading the transformation to individualized learning as the nation’s foremost provider of technology-powered online solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. K12’s curriculum is rooted in decades of research combined with 21st-century technology by cognitive scientists, interactive designers and teachers. K12’s portfolio of more than 550 unique courses and titles–the most extensive in the technology-based education industry–covers every core subject and four academic levels for high school including Honors and AP. K12 offers credit recovery courses, career-building electives, remediation support, six world languages and a deep STEM offering. The K12program is offered through K12partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

        CONTACT: K12 Inc.                 Investor Contact:                 Mike Kraft, 571-353-7778                 VP Investor Relations                 mkraft@k12.com                 or                 Press Contact:                 Jeff Kwitowski, 703-483-7281                 SVP Corporate Communications                 jkwitowski@k12.com        

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K12 Inc. (NYSE:LRN) Investor Alert: Investigation over Possible Violations of Securities Laws

An investigation for investors in K12 Inc. (NYSE:LRN) shares over potential securities laws violations by K12 Inc was announced and NYSE:LRN stockholders should contact the Shareholders Foundation at mail@shareholdersfoundation.com

 

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San Diego, CA – (SBWIRE) – 01/15/2014 – An investigation on behalf of investors who purchased shares of K12 Inc. (NYSE:LRN) between September 12, 2012 and October 8, 2013 over potential securities laws violations by K12 Inc. and certain of its directors and officers in connection certain financial statements was announced .



If you purchased shares of K12 Inc. (NYSE:LRN) between September 12, 2012 and October 8, 2013, you have certain options and you should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 – 1554.



The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of K12 Inc. (NYSE:LRN) concerning whether a series of statements by K12 Inc. (NYSE:LRN. regarding its business, its prospects and its operations were materially false and misleading at the time they were made.



In December 2012 a media report entitled “Profits and Questions at Online Charter Schools” raised serious concerns about K12’s business practices, alleging that its schools inflate their student rosters, are underperforming academically, have detrimental student-to-teacher ratios and gain wrongful access to public funds. Shortly after that a lawsuit was filed against K12 Inc. over alleged securities laws violations. The lawsuit was filed on behalf of investors who purchased K12, Inc. common stock during the period between September 9, 2009 and December 16, 2011. In 2013 the lawsuit settled for $6.75 million.



On Auhust 29, 2013, K12 Inc. reported its full fiscal year 213 financial results. K12 Inc’s Total Revenue rose from $708.41 per share for the 12 months period that ended on June 30, 2012 to $848.22 million for the 12 months period that ended on June 30, 2013 and its respective Net Income increased from $17.54 million to $28.11 million.



Shares of K12 Inc. (NYSE:LRN) grew from $16.27 per share in late 2012 to as high as $36.78 per share in September 2013.



Then on October 8, 2013, K12 Inc. announced it plans to host a conference call to discuss full fiscal year 2014 guidance on Thursday, October 10, 2013. K12 Inc. said that it is reporting Q1 FY 2014 average student enrollments1Q1 average student enrollments are equal to the official count date number, which is the first Wednesday of October in a year. in managed public schools of 128,550, an increase of 5.7% over Q1 FY 2013, which is below management’s expectations. K12 Inc. also said that it expects full fiscal year revenues in the range of $905 million to $925 million and full year operating income in the range of $53 million to $57 million.



Shares of K12 Inc. (NYSE:LRN) declined to $17.60 per share on October 9, 2013.



Those who purchased shares of K12 Inc. (NYSE:LRN), have certain options and should contact the Shareholders Foundation.



Contact:

Shareholders Foundation, Inc.

Trevor Allen

3111 Camino Del Rio North – Suite 423

92108 San Diego

Phone: +1-(858)-779-1554

Fax: +1-(858)-605-5739

mail@shareholdersfoundation.com

 

Media Relations Contact

Trevor Allen

General Manager

Shareholders Foundation, Inc.

858-779-1554

Email

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Source: Shareholders Foundation, Inc.

Posted Wednesday, January 15, 2014 at 8:30 AM CST – Permalink

    K12 Inc. Reports First Quarter Fiscal 2014 Results

    Q1 Consistent with Recent Guidance

    Board Authorizes $75 Million Stock Buyback

    HERNDON, Va., Nov. 7, 2013 (GLOBE NEWSWIRE) – K12 Inc. (NYSE:LRN), a leading provider of proprietary, technology-based curriculum, software and education services created for individualized learning for students primarily in kindergarten through 12th grade, today announced its results for the first fiscal quarter ended September 30, 2013.

    Financial Highlights for the Three Months Ended September 30, 2013 (First Quarter Fiscal Year 2014)

       – Revenues for the first quarter of FY 2014 increased 3.3% to $228.4       million.    – Revenues in Q1 were reduced by $4.5 million as a result of changes in       certain contract agreements. The revenue has been deferred to the       remainder of the current fiscal year.     – Institutional Sales were lower on market pressure for some of our product       lines.    – EBITDA, a non-GAAP measure (see reconciliation below), for the first       quarter of FY 2014 was $8.5 million, compared to $24.3 million from the       first quarter of FY2013.     – Operating loss of $8.5 million compared to operating income of $8.7       million in the first quarter of FY 2013.     – EBITDA and the operating loss in Q1 were negatively impacted by deferral       of revenue mentioned above along with higher seasonal selling,       administrative and operating expenses in anticipation of stronger       enrollments.     – Net loss attributable to common and Series A stockholders of $5.0 million,       compared to net income of $4.4 million from first quarter of FY 2013.     – Diluted net loss attributable to common stockholders per share was $0.13,       which includes the pro rata effect of the Series A Special shares       conversion to common shares on September 3, 2013. 

    Stock Buyback

    The Board of Directors has authorized the repurchase of up to $75 million of the Company’s outstanding common stock. Any purchases under this buyback would be dependent upon business and market conditions and other factors. The stock purchases may be made from time to time and may be made through a variety of methods including open market purchases and 10b5-1 plans.

    Comments from Management

    “We are clearly disappointed by our first quarter enrollment and revenue results and the operating issues that hampered growth. However, demand for our services remains strong and I am encouraged by the early indicators that our new programs will make a positive difference in student academic outcomes,” said Nate Davis, Executive Chairman of the Board. “The authorization of a stock buyback underscores the Board’s continuing confidence in the company’s capacity for further growth and creation of shareholder value,” added Davis.

    Cash, Capital Expenditures and Capital Leases

    As of September 30, 2013, the Company had cash and cash equivalents of $163.5 million, a decrease of $18.0 million or 9.9% from June 30, 2013. Cash and cash equivalents decreased $36.7 million, or 25.4%, from June 30, 2012 to September 30, 2012.

    Capital expenditures for the quarter ended September 30, 2013 were $12.6 million, a decrease of $2.6 million from the prior year’s first quarter, and was comprised of:

       – $4.3 million for property and equipment,     – $5.0 million for capitalized software development, and     – $3.3 million for capitalized curriculum. 

    Capital leases financed additional purchases of $10.7 million during the quarter ended September 30, 2013, primarily for student computers.

    Revenue and Enrollment Data

    Revenue

    The following table sets forth the Company’s revenues – Managed Public Schools (turn-key management services provided to public schools), Institutional Sales (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Schools (private schools for which it charges student tuition and makes direct consumer sales) – for the periods indicated:

                                            Three Months Ended         Change                                          September 30,          2013 / 2012                                      ———————-  —————– ($ in thousands)                        2013        2012        $         %                                      ———-  ———-  ——–  ——- Managed Public Schools                $ 196,944   $ 187,761   $ 9,183     4.9% Institutional Sales                      19,709      21,972   (2,263)   (10.3) International and Private Pay  Schools                                 11,713      11,363       350      3.1                                      ———-  ———-  ——–  ——- Total                                 $ 228,366   $ 221,096   $ 7,270     3.3%                                      ==========  ==========  ========  =======  

    Enrollment Data

    The following table sets forth average enrollment data for students in Managed Public Schools and total enrollment data for students in the International and Private Pay Schools for the periods indicated. These figures exclude enrollments from classroom pilot programs and consumer programs.

                              Three Months Ended September 30,      2013 / 2012                         ———————————-  ——————                                     2013              2012   Change   Change %                         —————-  —————-  ——-  ———  Managed Public Schools   Average Student    Enrollments *                 128,550           121,665    6,885       5.7% International and Private Pay Schools   Total Student    Enrollments                    13,284            12,996      288       2.2%   Total Semester    Course Enrollments             37,627            36,032    1,595       4.4%  

    * The Managed Public Schools average student enrollments include enrollments for which we receive no public funding. Q1 average student enrollments are equal to the official count date number, which is the first Wednesday of October in a year.

    Second Quarter 2014 Outlook

    The Company is forecasting the following for the second quarter of FY 2014:

       – Revenue in the range of $218 million to $228 million.     – Operating income in the range of $18 million to $22 million.     – Capital expenditures of $15 million to $20 million. 

    Special Note on Forward-Looking Statements

    This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: our potential inability to further develop, maintain and enhance our products and brands; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor performance or misconduct by operators in any school in our industry and in any school in which we operate; challenges from virtual public school or hybrid school opponents; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new contracts or renew existing contracts with schools; risks associated with entering into and executing mergers, acquisitions and joint ventures; failure to successfully integrate mergers, acquisitions and joint ventures; inability to recruit, train and retain quality teachers and employees; uncertainty regarding our ability to protect our proprietary technologies; risks of new, changing and competitive technologies; increased competition in our industry; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 7, 2013, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

    Conference Call

    The Company will discuss its first quarter FY2014 financial results during a conference call scheduled for Thursday, November 7, 2013 at 8:30 a.m. eastern time (ET).

    The conference call will be webcast and available on the K(12) 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 and analysts should dial (877) 546-5021 (domestic) or (857) 244-7553 at 8:15 a.m. (ET). The participant pass code is 27374131. A replay of the call will be available starting on November 7, 2013 at 12:00 p.m., through December 7, 2013, at (888) 286-8010 (domestic) or (617) 801-6888 (international) pass code 87356593. It will also be archived at www.k12.com in the Investor Relations section for 60 days.

    Financial Statements

    The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the quarter and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended September 30, 2013, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

                                         K12 INC.                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                       September 30,              June 30,                                          2013                     2013                               —————————  ——————-                               (In thousands, except share and per share data)            ASSETS Current assets   Cash and cash equivalents                     $ 163,474            $ 181,480   Accounts receivable, net    of allowance of $2,645    and $2,560 at September    30, 2013 and June 30,    2013, respectively                             271,808              186,459   Inventories, net                                 28,013               44,395   Current portion of    deferred tax asset                              21,478               11,368   Prepaid expenses                                 11,206               10,331   Other current assets                             32,385               23,916                               —————————  ——————-    Total current assets                           528,364              457,949 Property and equipment, net                        62,892               56,142 Capitalized software, net                          44,782               43,504 Capitalized curriculum  development costs, net                            63,989               64,599 Intangible assets, net                             31,332               32,139 Goodwill                                           61,523               61,413 Deposits and other assets                           5,415                3,150                               —————————  ——————-    Total assets                                 $ 798,297            $ 718,896                               ===========================  ===================   LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND            EQUITY Current liabilities   Current portion of capital    lease obligations                             $ 21,664             $ 19,395   Current portion of note    payable                                             –                  390   Accounts payable                                 50,617               21,838   Accrued liabilities                              15,702               17,027   Accrued compensation and    benefits                                        12,063               21,970   Deferred revenue                                 74,549               28,567                               —————————  ——————-    Total current liabilities                      174,595              109,187 Capital lease obligations,  net of current portion                            18,981               16,107 Deferred rent, net of  current portion                                    8,920                8,833 Deferred tax liability                             39,575               33,299 Other long-term liabilities                         2,598                2,512                               —————————  ——————-   Total liabilities                               244,669              169,938                               —————————  ——————- Commitments and contingencies                                          –                   – Redeemable noncontrolling  interest                                          15,200               15,200                               —————————  ——————- Equity: K12 Inc. stockholders' equity Common stock, par value  $0.0001; 100,000,000 shares  authorized; 41,143,988 and  37,440,662 shares issued  and outstanding at  September 30, 2013 and June  30, 2013, respectively                                 4                    4 Additional paid-in capital                        621,254              548,390 Series A Special Stock, par  value $0.0001; 2,750,000  authorized; zero and  2,750,000 shares issued and  outstanding at September  30, 2013 and June 30, 2013,  respectively                                          –               63,112 Accumulated other  comprehensive loss                                 (189)                (294) Accumulated deficit                              (86,090)             (81,050)                               —————————  ——————- Total K12 Inc. stockholders'  equity                                           534,979              530,162 Noncontrolling interest                             3,449                3,596                               —————————  ——————- Total equity                                      538,428              533,758                               —————————  ——————- Total liabilities,  redeemable noncontrolling  interest and equity                            $ 798,297            $ 718,896                               ===========================  ===================                                        K12 INC.           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                       Three Months Ended September 30,                              ————————————————-                                        2013                     2012                              ————————  ———————–                               (In thousands, except share and per share data) Revenues                                    $ 228,366                $ 221,096                              ————————  ———————– Cost and expenses   Instructional costs and    services                                   132,902                  118,648   Selling, administrative,    and other operating    expenses                                    98,244                   89,619   Product development    expenses                                     5,684                    4,168                              ————————  ———————– Total costs and expenses                      236,830                  212,435                              ————————  ———————– Income (loss) from  operations                                   (8,464)                    8,661 Interest expense, net                            (84)                    (228)                              ————————  ———————– Income (loss) before income  tax expense and  noncontrolling interest                      (8,548)                    8,433 Income tax (expense)  benefit                                        3,450                  (3,889)                              ————————  ———————– Net income (loss)                             (5,098)                    4,544 Adjust net (income) loss  attributable to  noncontrolling interest                           58                    (187)                              ————————  ———————– Net income (loss)  attributable to common  stockholders, including  Series A stockholders                      $ (5,040)                  $ 4,357                              ========================  ======================= Net income (loss) attributable to common stockholders per share, excluding Series A stockholders through the conversion date September 3, 2013:   Basic and Diluted                          $ (0.13)                   $ 0.11                              ========================  ======================= Weighted average shares used in computing per share amounts:   Basic and Diluted                        37,868,928               36,029,252                              ========================  =======================                                        K12 INC.              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH                                      FLOWS                                               Three Months Ended September 30,                                             ———————————-                                                         2013              2012                                             —————-  —————-                                                       (In thousands) Cash flows from operating activities Net income (loss)                                  $ (5,098)           $ 4,544 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization expense                 16,950            15,661 Stock-based compensation expense                       3,680             2,872 Excess tax benefit from stock-based  compensation                                          (385)           (1,086) Deferred income taxes                                (3,450)             3,488 
    Provision for doubtful accounts                          302               397 Provision for inventory obsolescence                       8                42 Provision (benefit) for student computer  shrinkage and obsolescence                            (260)               373 Changes in assets and liabilities:   Accounts receivable                               (85,659)          (98,297)   Inventories                                         16,374             9,699   Prepaid expenses                                     (861)           (3,431)   Other current assets                               (8,524)           (5,842)   Deposits and other assets                            (220)               299   Accounts payable                                    28,773             9,419   Accrued liabilities                                (1,353)             2,368   Accrued compensation and benefits                  (9,907)           (5,134)   Deferred revenue                                    45,542            44,308   Release of restricted cash                              –             1,501   Deferred rent                                          175             1,605                                             —————-  —————- Net cash used in operating activities                (3,913)          (17,214)                                             —————-  —————- Cash flows from investing activities   Purchase of property and equipment                 (4,274)           (3,863)   Capitalized software development costs             (5,006)           (6,289)   Capitalized curriculum development costs           (3,322)           (5,092)   Mortgage note to managed school partner            (2,100)                –                                             —————-  —————- Net cash used in investing activities               (14,702)          (15,244)                                             —————-  —————- Cash flows from financing activities   Repayments on capital lease obligations            (5,556)           (4,622)   Repayments on note payable                           (390)             (380)   Proceeds from exercise of stock options              7,106                56   Excess tax benefit from stock-based    compensation                                          385             1,086   Repurchase of restricted stock for    income tax withholding                            (1,508)             (645)                                             —————-  —————- Net cash provided by (used in) financing  activities                                               37           (4,505)                                             —————-  —————- Effect of foreign exchange rate changes on  cash and cash equivalents                               572               249                                             —————-  —————- Net change in cash and cash equivalents             (18,006)          (36,714) Cash and cash equivalents, beginning of  period                                              181,480           144,652                                             —————-  —————- Cash and cash equivalents, end of period           $ 163,474         $ 107,938                                             ================  ================  

    Non-GAAP Financial Measures

    EBITDA

    EBITDA consists of net income (loss), plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest charges. Interest expense primarily consists of interest expense for capital leases and long-term and short-term borrowings. We use EBITDA in addition to income (loss) from operations and net income (loss) 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 capital expenditures, tax payments, interest payments, or other working capital.

    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 an additional measurement of operating performance because it assists       us in comparing our performance on a consistent basis;     – 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; and on an adjusted basis in determining compliance with the       terms of our credit agreement. 

    The following tables provide a reconciliation of net income (loss) to EBITDA.

                                      Three Months Ended September 30,                                 ———————————-                                       2013              2012                                 —————–  —————                                           (In thousands) Net income (loss) – K12 Inc.           $ (5,040)          $ 4,357 Interest expense, net                          84              228 Income tax expense (benefit)              (3,450)            3,889 Depreciation and amortization              16,950           15,661 Noncontrolling interest                      (58)              187                                 —————–  ————— EBITDA                                    $ 8,486         $ 24,322                                 =================  ===============  

    About K12 Inc.

    K12 Inc. (NYSE:LRN) is leading the transformation to individualized learning as the nation’s foremost provider of technology-powered online solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. K12’s curriculum is rooted in decades of research combined with 21st-century technology by cognitive scientists, interactive designers and teachers. K12’s portfolio of more than 550 unique courses and titles–the most extensive in the technology-based education industry–covers every core subject and four academic levels for high school including Honors and AP. K12 offers credit recovery courses, career-building electives, remediation support, six world languages and a deep STEM offering. The K12 program is offered through K12 partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

    CONTACT: K12 Inc.          Investor Contact:          Mike Kraft, 571-353-7778          VP Investor Relations          mkraft@k12.com          or          Press Contact:          Jeff Kwitowski, 703-483-7281          SVP Corporate Communications          jkwitowski@k12.com