K12 upgraded to Overweight By First Analysis

August 10, 2016 10:01 am

Writer: Camille Ainsworth

Posted In:

US Broker Ratings

In an analyst rating update on Wednesday shares of K12 (NYSE:LRN) had their rating upgraded by analysts at First Analysis.

The broker said it has now set a ‘Overweight’ rating on shares of K12 with a price target of 14. The price target according to the broker shows a possible increase of 23.35% from the current stock price of 11.35.

Over the last twelve months K12’s share price has decreased from 14.88 to 11.35, changing by -23.72%.

The companies 50 day moving average is 12.68 and its 200 day moving average is 11.16. The 52 week high K12’s shares have peaked at is 15 whilst the 52 week low for the company’s shares is 7.11.

K12 has 37,492,000 shares which are currently outstanding with a price of 11.35 calculating K12’s market capitalisation to 425.53M USD .

K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a range of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include public school programs, which consists of managed programs and non-managed programs, Institutional Sales, which includes educational products and services sold to school districts, public schools and other educational institutions that it does not manage and international and private pay schools, which consists of private schools. The Company offers a range of learning applications, which include mobile learning, interactive games, virtual labs, e-book and digital book distribution.

This Free Education Comes with Strings Attached

What if you were able to homeschool for free?

This fall, Omaha Public Schools is opening a new online kindergarten-through-8th-grade school specifically targeting homeschooled students. In fact, only homeschooled students are eligible to enroll this year.

The program, Omaha Virtual School (OVS), is a publicly funded school that allows students to complete much of their coursework from the comforts of home. Enrolled students may also receive access to a computer and low-cost internet as an added benefit. The school is being marketed as the best of both worlds: Homeschooling with the support of professionals—and no price tag.

Sound too good to be true? It might be. Before you sign up, HSLDA recommends that you count the cost. Public programs like OVS take control of the academic curriculum and coursework away from parents and place it in the hands of the public school system. While parents have some involvement, they play of the role of “coach” and make way for certified teachers to do the bulk of the teaching. Parents will have little to no say in the educational objectives or course content of OVS classes.

Consider also the concerning results of studies on the academic achievement of publicly funded virtual schools in other states:

  • A National Education Policy Center study by Western Michigan University researchers showed that only 27.7% of full-time virtual schools run by K12 Inc. met the federal academic progress goals (compared to 52% of traditional public schools). Students in K12 schools scored lower in both reading and math and had an on-time graduation rate of a mere 49%, compared to a statewide average of 79% in states where K12 schools were located.
  • In 2011, Stanford University’s Center for Research on Education Outcomes (CREDO) reported that virtual students in Pennsylvania scored 13% worse in reading and 24% worse in math than students in public brick-and-mortar schools.
  • In its 2015 Online Charter School Study, CREDO found innovative new research suggesting that students of online charter schools had significantly weaker academic performance in math and reading, compared with their counterparts in conventional schools.
  • As reported in Education Week in January 2016, the Walton Family Foundation, which has pumped millions of dollars into virtual learning, conducted a series of studies on the academic achievement of these virtual schools. The conclusion: “stark evidence that most online charters have a negative impact on students’ academic achievement.”
  • Individual news stories abound using the familiar phrases such as “lagging behind” and “smaller learning gains” to describe the academic plight of virtual school students. For example, a 2011 New York Times article on the Agora Cyber Charter School reported that 60% of students are behind in math, 50% are behind in reading, and one-third do not graduate on time.

This research, coupled with the evidence showing the profound academic success of private home education, indicates that the home environment is not the only key to homeschoolers’ academic success. HSLDA believes one of the primary reasons homeschooled students excel is the regular parental involvement and control of the educational program. Parents know their children best and care about their children more than any other person or entity. Thus, they are best situated to craft a custom-tailored educational plan to meet the individual needs of each unique child.

We understand that homeschooling is hard work for both parents and students. And we know it comes with a price tag: though options for homeschool curriculum abound as the number of homeschooled students has now topped 2 million, this material is not free or even cheap. However, HSLDA cautions families to carefully calculate the cost of publicly funded free education before handing over educational control to the public school. Students in virtual schools perform worse academically than their peers, on average, and public funding of homeschooling brings public control and standardization, eliminating the distinctiveness of private homeschooling and inviting regulation.

As always, feel free to contact our office with your questions about homeschooling in Nebraska.

Resources

Homeschool Research

Understanding and Improving Full-Time Virtual Schools (National Education Policy Center)

Walton Family Foundation: We Must Rethink Online Learning (Education Week)

Profits and Questions at Online Charter Schools (New York Times)

Studies: Existing full-time virtual schools earn poor grades (Portland Press Herald)

Charter School Performance in Pennsylvania (Stanford University’s Center for Research on Education Outcomes)

Online Charter School Study 2015 (Stanford University’s Center for Research on Education Outcomes)

Latest Editorial Proves The Wall Street Journal Will Defend Almost Any For-Profit Education Company

The Wall Street Journal continued its streak of defending for-profit schools with track records of questionable practices and “abysmal results,” this time shifting its focus away from fraudulent for-profit colleges to attempt to sugarcoat the failing online charter company K12 Inc.

The virtual charter school company K12 Inc. recently reached a $168.5 million settlement with the state of California following an investigation into the company’s marketing and management practices. At the same time, the state’s Education Department has announced an audit of a California virtual charter network managed by K12. The Wall Street Journal’s editorial board was, once again, ready to dismiss facts and defend the for-profit education company against what the board views as a politically motivated attack, baselessly claiming that recently substantiated allegations against K12 are “trumped up.”

The California state investigation into K12, launched by state Attorney General Kamala Harris, alleged that the company had engaged in a number of misleading advertising practices about the quality of its online schools, pushed unfair contracts on public charter partners, and inflated student attendance numbers in order to receive more state funding. It was spurred, at least in part, by a whistleblower report and complaints from educators formerly employed by a California charter network managed by K12. Educators at the K12-managed network moved to unionize in 2014, citing excessive workloads and inability to “effectively advocate for students without the threat of retaliation or job loss.”

An investigative series at the San Jose Mercury News earlier this year concluded that K12’s network of schools “is failing key tests used to measure educational success,” that K12-affiliated “teachers have been asked to inflate attendance and enrollment records used to determine taxpayer funding,” and that the companyexploits charter [and] charity laws for money.” An online education expert explained to The Mercury News that K12 “has shown an inordinate level of failure, yet it’s continually given lifelines by policymakers who have irresponsibly ignored what’s going on.”

Yet the Journal contended that another audit of K12’s management practices “looks trumped up” in a July 17 editorial. Complaining about K12’s settlement with the state of California, the editorial board characterized the investigation of K12 as part of a larger “coordinated assault” on for-profit colleges and education companies and claimed that “Democrats are ambushing” the virtual charter school company. According to the editorial board, the further audit of K12 means “Thuggish government marches on.”

The disastrous results of K12’s schooling model have also been well-documented in media investigations and in research from left-leaning and right-leaning organizations. A New York Times investigation raised red flags about K12’s practices as early as 2011, concluding about the company:

A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed.

Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.

A 2011 Washington Post report singled out K12’s early lobbying efforts and political contributions, pointing to limited data on the effectiveness of virtual charter schools even as the company successfully opened up state markets for its products through political involvement. In 2012, PolitiFact concluded that a Tennessee politician’s assertion that K12’s results were “the bottom of the bottom” was true.

The most recent reports from Mathematica Policy Research, Stanford University’s Center for Research in Education Outcomes, and the Center on Reinventing Public Education concluded that “students of online charter schools had significantly weaker academic performance in math and reading, compared with their counterparts in conventional schools.” BuzzFeed News’ coverage of the reports concluded that “Both Sides Of The Education Debate Are United In Scorn” for online charters like K12 due to “abysmal results” for students.

But K12 has the corporate and conservative credentials to warrant a healthy defense from The Wall Street Journal.

K12 Inc., until recently, called itself a “proud” member of the corporate-driven bill mill American Legislative Education Council (ALEC), which has pushed virtual schools legislation that would create greater demand for products like those produced by K12. K12 has also contributed financially to the Foundation for Excellence in Education, a pro-privatization think tank founded by Jeb Bush that also frequently touts digital learning tools in its policy recommendations. The majority of K12’s executives hail from the corporate world or from other for-profit education companies, and the head of K12’s “curriculum and products organization” previously spearheaded product development at Pearson Publishing.

The Journal has a long history of defending the sometimes indefensible when it comes to for-profit educational companies, often relying on violent analogies to make its point.

The paper stood by shuttered for-profit college chain Corinthian Colleges, even as the company faced multiple state and federal investigations related to its allegedly fraudulent marketing practices and its efforts to facilitate predatory private lending. In fact, the Journal’s editorial board characterized the numerous investigations, launched because of consumer complaints, as “political revenge” by “California job killer” Kamala Harris and a “drive-by shooting” and “contract hit” by the Obama administration. In April 2015, as the company closed its last remaining campuses, The Wall Street Journal wrote a “last rites” editorial lamenting that “the feds and Kamala Harris put 16,000 students on the street.” The now-defunct company has been held legally responsible for its practices, with several investigations and legal actions concluding that Corinthian had, indeed, misled its students about job placement rates and private loan terms, and that former students were owed debt relief.

The Journal has also repeatedly characterized efforts to address these types of fraudulent practices at other for-profit institutions as “regulatory assault,” a “ploy to win over millennials,” a “contract hit” (again), and a political “stealth attack” akin to “drone strikes,” dismissing evidence that these types of schools have taken advantage of veterans and servicemembers, as well as other innocent students, on the taxpayers’ dime.

K12 Inc. Announces New Online Private School Scholarship

Company to award five full-tuition scholarships to K12 International Academy for 2016-17

HERNDON, Va., July 19, 2016 /PRNewswire-USNewswire/ —K12 Inc. has announced that a new merit-based scholarship is available for students interested in attending its private online school. The K12 Private School Scholarship is designed to support economically disadvantaged high school youth who have demonstrated academic success and seek a more rigorous and individualized educational experience. The Scholarship Committee will award a one year, renewable scholarship to a total of five recipients that will cover the cost of tuition, books and support services at K12 International Academy.

"I am delighted to announce this scholarship, which reflects our mission to put students first," says Stuart Udell, CEO of K12 Inc. "Online learning is uniquely well suited to the motivated student who wants more out of their education. This scholarship will help remove any barriers related to financial means for the recipients."

K12 International Academy is an accredited online private school for full- and part-time students. Operating since 2008, K12 International Academy utilizes the award-winning K12 curriculum and offers students a choice from more than two hundred and forty online courses to suit their interests and goals. K12 teachers customize lesson plans to create an individualized learning experience for their students.

Course offerings include multiple versions of core online high school courses, an extensive array of electives including world languages and even Career Technical Education classes designed to give students a head start on their career goals by earning technical and specialty trade credentials, college credits, and workplace experiences. The school also offers a wide range of clubs, activities and organizations.

The K12 Private School Scholarship is valued at $6,995 a year and is renewable for up to $28,000 over 4 years. Five scholarships will be awarded annually based on a combination of merit and families’ financial circumstances. In addition to the tuition grant, scholarship recipients will be eligible for the following:

  • Laptop computer during enrollment
  • Books and materials
  • An extensive support team of teachers, academic coaches, and counselors.

Scholarship students will also be assigned a mentor who will meet regularly with the student to assist with the transition to online learning and provide additional support.

All students who attend a public, private, or charter school or who are homeschooled are eligible for consideration based upon their completed application to K12 Inc., which must be received no later than August 5, 2016. Students must have a GPA of 3.0, must be a rising 9th grade student and must be a U.S. citizen residing in the United States. Additional documentation demonstrating financial need may be required from applicants.

For more information about the K12 Private School Scholarship, including how to apply, details of the selection process and documentation requirements, visit http://www.icademy.com/k12-international-academy-scholarship

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. With nearly a half-billion dollars invested in developing award winning curriculum, K12 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. More information can be found at www.K12.com or on Facebook.

Logo – http://photos.prnewswire.com/prnh/20110113/PH29436LOGO

SOURCE K12 Inc.

Related Links

http://www.K12.com

California Reaches Settlement With K12 Inc Over Fraudulent Claims, K12 Inc Responds

Jul 11, 2016

TARNISHING THE GOLDEN STATE: California Attorney General Kamala Harris announced on July 8 that her office had reached a $168.5 million settlement as a result of its investigation into K12 Inc and its affiliate, California Virtual Schools (CAVA). K12 Inc, a for-profit online charter school operator, and CAVA, a collective of nonprofit online charter schools serving 13,000 California students, will forgive $160 million in debt, pay $6 million to cover the costs of the investigation and pay $2.5 million in response to several private lawsuits. 

The Bureau of Children’s Justice and False Claims within the California Justice Department alleged that K12 Inc and CAVA presented false and misleading statements about class sizes, fees and students’ progress. K12 and CAVA will also be subject to contract reform and independent reviews.

K12 Inc has responded to the Attorney General’s statements by saying that it has neither admitted nor committed wrongdoing. The company said Harris’ settlement figures were incorrect and emphasized that it would only be paying $2.5 million to settle cases. K12 Inc CEO Stuart Udell told the Wall Street Journal that Harris “grossly mischaracterized the value of the settlement, just as her office did with regard to the issues it investigated.”

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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

Snyder signs legislation expanding educational opportunities

Tuesday, May 15, 2012

LANSING, Mich. ‒ Gov. Rick Snyder today signed legislation expanding educational opportunities and choices for students and families by increasing the number of cyber charter schools and broadening eligibility for dual enrollment programs.

The reforms help students to best meet their needs while complementing Michigan’s already outstanding traditional public schools.

Michigan students can now achieve a quality education without boundaries,” Snyder said. “Empowering more parents and students with the option to enroll in cyber charter schools and attend college level courses increases not only their educational opportunities, but also their potential for success.”

Senate Bill 619, sponsored by Sen. Patrick Colbeck, lifts the cap on the number of cyber charter schools, and sets an enrollment limit of 2 percent of student population. It also removes the requirement of cyber school students having been previously enrolled in a public school.

Any applicant for a cyber school contract must demonstrate experience delivering a quality education program that improves student academic achievement, and offer any configuration of grades K-12 or all of those grades. Students will be issued a computing device by the school and the school will be responsible for subsidizing the cost of Internet access.

SB 619 is now Public Act 129 of 2012.

“One of the most innovative educational opportunities we can offer our children is the inclusion of cyber charter school options for our public school students,” Colbeck said. “These schools provide a free, public education to students that can be tailored to address each child’s strengths and weaknesses while providing increased one-on-one communication with a teacher.

“Providing more choice in public education empowers parents and gives them greater input in determining the best learning environment for their children. Cyber charter schools are a unique way to broaden that choice for many of Michigan’s families.”

Also signed as part of the package were:

SB 621, sponsored by Sen. Goeff Hansen, removes restrictions preventing public schools from receiving state aid funds to reimburse costs spent on some home and private schooled students who take classes at the public school, and allows any school in the student’s ISD or adjacent ISD to make a claim of reimbursement. SB 621 is now PA 130 of 2012.

SBs 622, 623, 709 and 710, sponsored by Sen. Judy Emmons, expand the eligibility for high school students to participate in dual enrollment programs at community colleges or universities, or at career and technical preparation programs by removing a requirement that a student be a junior. The measures also allow home and private schooled students to enroll. The bills are now PAs 131-134 of 2012.

Visit www.legislature.mi.gov for more information on the bills.

#####




K12 International Academy Launches Destinations Career Program for Fall 2016

Online private school adds Career Technical Education option to extensive course list

Apr 12, 2016, 12:46 ET
from K12 International Academy


HERNDON, Va., April 12, 2016 /PRNewswire-USNewswire/ — K12 International Academy, an accredited, online private school open to students in grades K-12 worldwide, has launched a new Career Technical Education (CTE) program for fall 2016. The Destinations Career Program at K12 International Academy gives full- and part-time students in grades 9–12 a unique opportunity to prepare for both college and the workforce, regardless of where they live. The program integrates Career and Technical Education (CTE) courses from two nationally recognized career Clusters with existing core academics in a rigorous and relevant curriculum that is delivered online.

K12 International Academy’s career readiness offering uses a comprehensive end-to-end approach, designed to prepare students to enter the workforce or pursue other post-secondary options in their career field of interest. Students can access multiple versions of online high school courses and opt to take online CTE courses in one of two Career Clusters:  Business, Management, and Administration or Information Technology, with the opportunity to earn nationally recognized certifications in a chosen field of study.  Each career cluster has three separate career paths to choose from, giving students exposure to advanced study in their chosen field of interest


“Typically students do not get this level of exposure to career-specific skills until well into their college studies,” said Miriam Rube, Head of School at K12 International Academy. “Exploring their career passions in high school gives students more confidence in selecting a college major in one of these high demand fields of study. We’re very excited to bring the power of online learning to CTE and help students get access to these certifications no matter where they live.”

Founded in 2008, K12 International Academy uses the award-winning K12 curriculum to offer students in grades K-12 an individualized learning experience. Students who enroll follow an academic program that includes engaging web-based lessons along with age-appropriate instructional materials – books, videos and other hands-on tools and resources – which are shipped directly to each student’s home.  

Instruction is facilitated by highly qualified teachers who individualize the learning experience for each student. Teachers also organize numerous virtual field trips, online clubs and school activities where students have the opportunity to participate in events that blend academics and socialization. Counselors work with students to help them identify career paths most in line with their interests and talents.

K12 International Academy is accredited by AdvancEd and its graduates receive a U.S. diploma. Students in the Destinations Career Program can also earn a nationally recognized career readiness certificate from the ACT, and an industry-recognized certification in their chosen career pathway. Past K12 International Academy graduates have gone on to attend prestigious colleges and universities such as Harvard, Duke, Rensselaer Polytechnic Institute and various military academies.

Enrollment is now open for the K12 International Academy 2016-2017 academic school year, and all interested families are encouraged to visit http://www.icademy.com for more information, as well as details on upcoming community events and online information sessions.   

About K12 International Academy
The K12 International Academy is an accredited private school program that serves students in grades K through 12. Open to both full- and part-time students, the K12 international Academy gives parents and families the choice to access the award-winning curriculum and tools provided by K12 Inc. (NYSE:  LRN), the nation’s largest provider of proprietary curriculum and online education programs. More information can be found at http://www.icademy.com.

Logo – http://photos.prnewswire.com/prnh/20160412/354372LOGO

 

SOURCE K12 International Academy

Related Links

http://www.icademy.com


AlphaMark Advisors LLC Has $1,087,000 Stake in K12 Inc. (LRN)

AlphaMark Advisors LLC raised its position in K12 Inc. (NYSE:LRN) by 208.9% during the fourth quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 123,547 shares of the company’s stock after buying an additional 83,547 shares during the period. AlphaMark Advisors LLC owned approximately 0.33% of K12 worth $1,087,000 at the end of the most recent quarter.

Several other hedge funds have also recently bought and sold shares of the company. Simplex Trading raised its stake in K12 by 1,900.0% in the fourth quarter. Simplex Trading now owns 20 shares of the company’s stock valued at $0 after buying an additional 19 shares in the last quarter. California State Teachers Retirement System raised its stake in K12 by 1.8% in the fourth quarter. California State Teachers Retirement System now owns 62,600 shares of the company’s stock valued at $551,000 after buying an additional 1,122 shares in the last quarter. Strs Ohio raised its stake in K12 by 33.1% in the fourth quarter. Strs Ohio now owns 70,400 shares of the company’s stock valued at $619,000 after buying an additional 17,500 shares in the last quarter. ClariVest Asset Management LLC raised its stake in K12 by 4.6% in the fourth quarter. ClariVest Asset Management LLC now owns 125,500 shares of the company’s stock valued at $1,105,000 after buying an additional 5,500 shares in the last quarter. Finally, Acadian Asset Management raised its stake in K12 by 1.4% in the fourth quarter. Acadian Asset Management now owns 813,788 shares of the company’s stock valued at $7,160,000 after buying an additional 11,120 shares in the last quarter.

Shares of K12 Inc. (NYSE:LRN) opened at 10.20 on Wednesday. The company’s 50 day moving average is $8.55 and its 200 day moving average is $11.31. The firm has a market cap of $381.12 million and a price-to-earnings ratio of 329.03. K12 Inc. has a 52-week low of $7.11 and a 52-week high of $17.71.

K12 (NYSE:LRN) last announced its quarterly earnings data on Thursday, January 28th. The company reported $0.23 EPS for the quarter, topping the consensus estimate of $0.22 by $0.01. The company earned $208.80 million during the quarter, compared to the consensus estimate of $211.54 million. The business’s revenue was down 9.7% on a year-over-year basis. During the same period in the prior year, the firm posted $0.33 EPS. Analysts anticipate that K12 Inc. will post $0.34 earnings per share for the current year.

Separately, Zacks Investment Research upgraded shares of K12 from a “hold” rating to a “buy” rating and set a $14.00 price target on the stock in a research report on Thursday, October 22nd.

K12 Inc. (NYSE:LRN) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a range of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include public school programs, which consists of managed programs and non-managed programs, Institutional Sales, which includes educational products and services sold to school districts, public schools and other educational institutions that it does not manage and international and private pay schools, which consists of private schools. The Company offers a range of learning applications, which include mobile learning, interactive games, virtual labs, e-book and digital book distribution.

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K12 Inc. Second Quarter Fiscal 2016 Earnings Conference Call Details


January 14, 2016, 05:19:00 PM EDT

HERNDON, Va., Jan. 14, 2016 (GLOBE NEWSWIRE) — K12 Inc. (NYSE:LRN) announced today it plans to host a conference call to discuss its second quarter fiscal year 2016 financial results during a conference call scheduled for Thursday, January 28, 2016 at 8:30 a.m. eastern time (ET).

A live webcast of the call will be available at http://ift.tt/1SUA0SS. 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.  Please access the web site at least 15 minutes prior to the start of the call.

A replay of the call will be available starting on January 28, 2016 at 11:00 a.m. ET through February 28, 2016 at 11:00 a.m. ET, at (877) 660-6853 (domestic) or (201) 612-7415 (international) using conference ID 13627926. A webcast replay of the call will be available at http://ift.tt/1SUA0SS 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 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 or Press Contact:
Mike Kraft, 571-353-7778
VP Finance & Corporate Treasurer
mkraft@k12.com

Source: K12 Inc.