Grand Canyon Education(US:LOPE)2021-02-17 21:09Financial Performance - The company recorded $844 million in service revenue for the year ended December 31, 2020[344]. - Service revenue for 2020 was $844,096, an increase of 8.4% compared to $778,643 in 2019[351]. - Operating income rose to $277,437, compared to $265,131 in 2019, reflecting a growth of 4.9%[351]. - Net income for 2020 was $257,196, slightly down from $259,175 in 2019, indicating a decrease of 0.8%[353]. - Basic earnings per share increased to $5.49, up from $5.42 in 2019, a rise of 1.3%[351]. - The company reported a comprehensive income of $257,196 for 2020, compared to $259,628 in 2019[353]. - Net income for the year ended December 31, 2020, was $229,011,000, compared to $308,823,000 in 2019[360]. - Cash flows provided by operating activities decreased to $229,011,000 in 2020 from $308,823,000 in 2019[360]. - The total income tax expense for the year ended December 31, 2020, was $75,944, compared to $58,327 in 2019[479]. - The effective income tax rate for the year ended December 31, 2020, was 22.8%, an increase from 18.4% in 2019[482]. Assets and Liabilities - Total assets increased to $1,844,579, up from $1,690,289 in 2019, representing a growth of approximately 9.2%[349]. - Total current assets increased to $333,742, compared to $208,344 in 2019, marking a significant increase of 60.1%[349]. - Total current liabilities rose to $118,718, up from $95,230 in 2019, an increase of 24.6%[349]. - The total stockholders' equity increased to $1,574,329, up from $1,443,433 in 2019, representing a growth of 9.1%[349]. - As of December 31, 2020, the Company had notes payable of $107,774, down from $140,918 in 2019[459]. Revenue Recognition and Accounting - The Company recognizes service revenue over time using the output method, reflecting the consumption of services by university partners[422]. - The Company has no contract assets and reports contract liabilities as deferred revenue and student deposits in the consolidated balance sheets[416]. - The Company capitalizes costs related to internal-use software and content development, amortizing these costs over their estimated useful lives[391][395]. - The Company evaluates long-lived assets for impairment whenever events indicate that the carrying amount may not be recoverable[396]. - The Company recognizes right-of-use assets and lease liabilities based on the present value of lease payments over the lease term[397]. Acquisitions and Investments - The acquisition of Orbis Education in January 2019 was for $361,184,000, net of cash acquired[364]. - GCE acquired Orbis Education for $361,184, funded by $191,000 from an amended credit agreement and $171,034 in operating cash[376]. - The fair value of the assets acquired exceeded the purchase price by $157,825, recorded as goodwill[376]. - Identified intangible assets from the acquisition were valued at $210,280, primarily from university partner relationships[378]. - The Company has consolidated the results of operations for Orbis Education since the acquisition date[380]. Risk Management - The company emphasizes the importance of managing risks associated with strategic initiatives, including potential acquisitions and expansion of services[11]. - The company is subject to risks associated with changes in federal and state laws and regulations affecting its operations[11]. - The company aims to effectively manage future growth and the impact of public health emergencies on its operations[15]. - The company actively monitors the impact of the COVID-19 pandemic on expected credit losses, indicating a proactive approach to risk management[440]. - The company has maintained an allowance for credit losses of $5,000 since the transition to an education services company on July 1, 2018, with no credit losses reported from university partners[428]. Shareholder Information - The Company repurchased 1,602 shares of common stock at an aggregate cost of $129,045 during the year ended December 31, 2020[476]. - As of December 31, 2020, there were 419 thousand shares of restricted stock outstanding, with a weighted average grant date fair value of $83.43 per share[490]. - The Company granted 164 thousand shares of restricted stock during fiscal year 2020[487]. - The aggregate intrinsic value of stock options outstanding as of December 31, 2020, was $13,586 thousand[494]. Operational Insights - The company recorded fluctuations in revenues due to seasonality, affecting its overall financial performance[15]. - The Company generates revenue through Services Agreements with university partners, with initial terms ranging from 7-15 years[421]. - The Company provided education services to 25 university partners across the United States as of December 31, 2020[365]. - Marketing and communication expenses include lead acquisition and digital strategies, reflecting the Company’s focus on enhancing brand identity and student engagement[431]. - The Company plans to continue expanding its service offerings and investing in technology to drive future growth[502].