无忧短视频

无忧短视频 Reports Record Revenue of $12.1 Million in the Second Quarter Fiscal Year 2020, Accelerating to 49% Growth Year-over-Year

Net Loss Improves to ($0.6) Million as All Three Business Units Deliver Profitability on a Net Income Basis

Company EBITDA Positive (a non-GAAP financial measure), Delivering $0.5 Million or 4% margin

NEW YORK, Dec. 10, 2019 (GLOBE NEWSWIRE) -- 无忧短视频, Inc. (Nasdaq: ASPU)( 鈥渢he Company or AGI鈥�), an education technology holding company, today announced financial results for its 2020 fiscal second quarter ended October 31, 2019.

Second Quarter and Year-to-Date Fiscal Year 2020 Summary

Second Quarter Performance Highlights

• Revenue accelerated to 49% growth, while marketing expenses declined by 11% year-over-year, driving a gross margin improvement of 1,300 basis points or 63%
• Focused marketing expenditure resulted in record enrollment growth in highest lifetime value (LTV) degree programs
• Bookings rose 92% to $31.3 million lifting average revenue per enrollment (ARPU) by 35% to $14,125
• Aspen University Online and Pre-Licensure BSN units, as well as United States University, all delivered net income due to improved operating efficiencies and lower enrollment costs
• Cash used in operations declined $1.8 million or 84% year-over-year to $0.3 million

Michael Mathews, Chairman and CEO of AGI, commented, 鈥淥ur strong momentum in Fiscal 2020 accelerated during the second quarter with revenue increasing 49% year-over-year, while operating expense increased only 22% year-over-year due to diligent expense management and improved operating leverage. This resulted in a significant reduction in our net loss and generated positive EBITDA in the quarter. By targeting our marketing spend on degree programs with the highest lifetime value (LTV), we had record bookings in the quarter increasing by 92%, as well as record average revenue per enrollment or ARPU increasing by 35%. This is the first quarter since acquiring United States University in December 2017 and launching our Pre-Licensure BSN nursing program in July 2018 that all three business units, Aspen University Online and Pre-Licensure BSN, as well as United States University, produced net income in the quarter. We remain committed to our goals of sustainable long-term growth, improving profitability of our universities and improvement in cash flow from operations. Given the strong performance in the first half of fiscal year 2020, we now expect annual revenue growth to meet or exceed 41% for the full fiscal year. Our improving financial performance will continue to support our Pre-Licensure BSN expansion strategy, an important long-term growth and profitability catalyst for the Company.鈥�

*See 鈥淣on-GAAP Financial Measures鈥� at page 3.

Fiscal 2020 Second Quarter Financial and Operational Results (versus Fiscal 2019 Second Quarter):

• New student enrollments increased 42% to quarterly record of 2,217
  • Aspen University (AU) new student enrollments increased 41% to 1,823
  • United States University (USU) new student enrollments increased 45% to 394
• Weighted average cost of enrollment declined 25% driven by reduced lead costs and higher conversion rates
• Bookings increased 92% to $31.3 million due to strong growth in highest LTV degree programs
• Average revenue per enrollment (ARPU) increased 35% over the prior year to $14,125
• Total student enrollment grew 35% over the prior year to 10,718
• Total nursing student body increased to 8,904 from 6,206 students, or 83% versus 78% of total student enrollment

AGI delivered 2,217 new student enrollments for the second fiscal quarter ended October 31, 2019 (Q2 2020), a 42% increase year-over-year. Aspen University accounted for 1,823 new student enrollments (including 190 Doctoral enrollments and 437 Pre-licensure BSN AZ campus enrollments). United States University (鈥淯SU鈥�) accounted for 394 new student enrollments (primarily MSN-Family Nurse Practitioner (鈥淔NP鈥�) enrollments). Enrollment growth at Aspen University was highlighted by the Doctoral unit, which increased by 43% year-over-year, and the Pre-Licensure BSN unit, which increased 58% on a sequential basis. The sequential acceleration of growth in the Pre-Licensure BSN unit is a result of a full quarter of enrollments across both campuses that are now open in Phoenix, AZ.

Below is a comparison of enrollments and bookings** from Q2 2020 to the quarter ended October 31, 2018 (Q2 2019).听 The Company鈥檚 total enrollments rose 42% year-over-year, while bookings increased 92% year-over-year to $31.3 million from $16.3 million. This translates to a 35% increase in average revenue per user (ARPU)** year-over-year, from $10,434 to $14,125, driven by the Company鈥檚 focused marketing spending on the highest LTV degree programs during the quarter.

**鈥淏ookings鈥� are defined by multiplying LTV by new student enrollments for each operating unit. 鈥淎verage Revenue Per
User or (ARPU)鈥� is defined by dividing total bookings by total enrollments.

AGI鈥檚 overall active student body (including both Aspen University and USU) grew 35% year-over-year from 7,950 to 10,718 students as of October 31, 2019, and students seeking nursing degrees were 8,904 or 83% of total students at both universities.

Aspen University鈥檚 total active degree-seeking student body grew 27% year-over-year from 7,107 to 9,016. Aspen鈥檚 School of Nursing grew 34% year-over-year, from 5,466 to 7,299 active students, which includes 1,051 active students in the BSN Pre-Licensure program in Phoenix, AZ. Specifically, Aspen鈥檚 BSN Pre-Licensure program active student body grew sequentially by 57%, from 670 to 1,051 students, as a result of now having two campuses open in Phoenix, AZ. Aspen University students paying tuition and fees through a monthly payment method grew by 17% year-over-year, from 5,074 to 5,927. Those 5,927 students paying through a monthly payment method represent 66% of Aspen University鈥檚 total active student body.

USU鈥檚 total active student body grew year-over-year from 843 to 1,702, or 102%, and up sequentially by 14%. USU鈥檚 MSN-FNP active student body grew sequentially from 1,294 to 1,463 for an increase of 13%. USU鈥檚 MSN-FNP program now represents 86% of USU鈥檚 active student body. USU students paying tuition and fees through a monthly payment method grew to 1,101 students representing 65% of USU鈥檚 total active student body in Q2 2020.

Revenues increased 49% to $12,085,965 for the fiscal quarter ended October 31, 2019 as compared to $8,095,344 in Q2 2019. USU accounted for approximately 27% and Aspen University鈥檚 Pre-Licensure BSN program accounted for approximately 12% of overall Company revenues.

Gross profit increased to $7,638,195 or 63% gross margin for Q2 2020 versus $4,083,951 or 50% gross margin in Q2 2019. Aspen University gross profit represented 65% of Aspen University revenues for Q2 2020, while USU gross profit equaled 67% of USU revenues for Q2 2020. Aspen University instructional costs and services represented 16% of Aspen University revenues for Q2 2020, while USU instructional costs and services equaled 23% of USU revenues for Q2 2020. Aspen University marketing and promotional costs represented 16% of Aspen University revenues for Q2 2020, while USU marketing and promotional costs equaled 11% of USU revenues for Q2 2020.

Net loss applicable to shareholders was ($638,168) or diluted net loss per share of ($0.03). Aspen University generated $1.8 million of net income for Q2 2020, and USU generated $151,359 of net income in Q2 2020. AGI corporate incurred $2.6 million of expenses for Q2 2020.

EBITDA, a non-GAAP financial measure, was $460,919 or 4% as compared to an EBITDA loss of ($1,899,814) or (23%) in Q2 2019. Adjusted EBITDA, a non-GAAP financial measure, was $1,360,808 or 11% as compared to an Adjusted EBITDA loss of ($1,304,543) or (16%) in Q2 2019.

Aspen University generated EBITDA of $2.1 million or 24% margin and Adjusted EBITDA of $2.6 million or 26% margin for Q2 2020. Note that Aspen鈥檚 pre-licensure BSN program accounted for $537,983 of the $2.1 million EBITDA generated at Aspen University, operating at an EBITDA margin of 35% -- becoming the highest margin unit of the Company. USU generated EBITDA of $455,391 or 14% margin and $519,818 of Adjusted EBITDA or 16% margin Q2 2020. AGI corporate contributed $1.7 million of expenses toward the $1,360,808 Adjusted EBITDA result for Q2 2020.

The Company used cash of $0.3 million in operations in Q2 2020, as compared to using $2.1 million in Q2 2019, an improvement of 84% year-over-year.

Conference Call:

无忧短视频, Inc. will host a conference call to discuss its fiscal year 2020 second quarter financial results and business outlook on Tuesday, December 10th, 2019, at 4:30 p.m. (ET).听听 Aspen will issue a press release reporting results after the market closes on that day. The conference call can be accessed by dialing toll-free听(844) 452-6823听(U.S.) or听(731) 256-5216听(international), passcode 3788764. Subsequent to the call, a transcript of the audiocast will be available from the Company鈥檚 website at ir.aspen.edu. There will also be a seven day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 or (404) 537-3406 (international), passcode 3788764.

Non-GAAP 鈥� Financial Measures:

This press release includes both financial measures in accordance with the Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company鈥檚 performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Our management uses and relies on Adjusted EBITDA and EBITDA, each of which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to these non-GAAP financial measures in planning, forecasting and analyzing future periods. Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparisons.听 Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

AGI defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below. It is important to note that there were zero non-recurring charges for the fiscal quarter ended October 31, 2019 compared to $118,872 in the fiscal quarter ended October 31, 2018. Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and analysts to evaluate and assess our core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.

We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between AGI and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.

The following table presents a reconciliation of net loss allocable to common shareholders to Adjusted EBITDA:

About 无忧短视频, Inc.:

无忧短视频, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 our annual revenue growth, Pre-Licensure BSN expansion, and forecasted LTV and bookings. The words 鈥渂elieve,鈥� 鈥渕ay,鈥� 鈥渆stimate,鈥� 鈥渃ontinue,鈥� 鈥渁nticipate,鈥� 鈥渋ntend,鈥� 鈥渟hould,鈥� 鈥減lan,鈥� 鈥渃ould,鈥� 鈥渢arget,鈥� 鈥減otential,鈥� 鈥渋s likely,鈥� 鈥渨ill,鈥� 鈥渆xpect鈥� and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the continued high demand for nurses, the continued effectiveness of our marketing efforts, unanticipated delays in opening new campuses, failure to continue to obtain enrollments at low acquisition costs and keeping instructional costs down, potential student attrition and national and local economic factors. Other risks are included in our filings with the SEC including our Form 10-K for the year ended April 30, 2019 and Form 10-Q for the three months ended July 31, 2019. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Investor Relations Contact:

Kim Rogers
Managing Director
Hayden IR
385-831-7337听

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Continued)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS鈥� EQUITY
Three Months Ended October 31, 2019 and 2018
(Unaudited)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS鈥� EQUITY (CONTINUED)
Six Months Ended October 31, 2019 and 2018
(Unaudited)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)

The following table provides a reconciliation of cash and restricted cash reported within the unaudited consolidated balance sheets that sum to the same such amounts shown in the unaudited consolidated statements of cash flows:

Released December 10, 2019