— San Diego-based Bridgepoint Education, a for-profit postsecondary education services provider, said its revenue for the first quarter of 2018, which ended on March 31, came in at $118 million, down from last year’s first quarter revenue of $129.5 million.

Bridgepoint Q1 financial results

Revenue – $118 million, down about 9 percent

Operating income – $0.4 million

Net income – $2.3 million

Income tax benefit

recognized – $1.7 million

Combined cash, cash

equivalents and

investments – $173.3 million (the company has used $15.1 million of cash in operating activities)

“The first quarter represented the beginning of a new chapter for Bridgepoint,” said Andrew Clark, company co-founder, CEO, president and director.

Clark provided shareholders an update May 1 on the business’ transition to becoming an Online Program Management (OPM) company, student enrollment, and on the company’s litigation with the Iowa Department of Education relating to GI Bill benefits.

Net income for the first quarter was $2.3 million compared with net income of $9.9 million in the same quarter last year.

Earnings and EPS (earnings per share) fell below expectations, according to a company note by Peter Appert, a senior research analyst with PiperJaffray.

“The company’s planned conversion of the University to a not-for-profit entity, with Bridgepoint then becoming an online program management (OPM) firm is potentially intriguing, but the economic model is not yet clear,” Appert added.

On March 13, Bridgepoint Education announced plans to separate the company from its academic institutions, Ashford University and University of the Rockies, in order to become an OPM company. The move would allow Bridgepoint the ability to offer management services to other higher education institutions.

Shift in Business Model

OPM companies are for-profit organizations that help nonprofit schools develop online programs, mostly at the master’s degree level.

The actions, which would see Ashford University returning to nonprofit status and merge with the University of the Rockies, still needs several regulatory approvals, including from the U.S. Department of Education, the Internal Revenue Service and WASC (Western Association of Schools and Colleges).

Clark said he anticipates the WASC Commission to review the merger and nonprofit status matter by the end of June, with notification of the results coming in early July. “Because of the dynamic nature of the higher education environment, we believe this conversion will permit us to continue to pursue our mission in new and exciting ways,” he said.

VA Impact on Enrollment

Student enrollment at the company’s combined academic institutions was 41,523 students, a drop from 46,383 students at the same time last year.

Clark said the company doesn’t expect total enrollment to turn positive during 2018 and that he believes the declines in total enrollment should moderate with each consecutive quarter.

Clark attributed a decline in new enrollment to a voluntary decision to temporarily suspend enrollment for VA students.

Ashford University had been involved in a dispute with U.S. Department of Veterans Affairs over receiving GI Bill funding from its VA student base.

However, after a favorable court ruling, the company resumed enrolling VA students on Feb. 6.

“While this is a very positive development for Ashford, we have been and will continue to work in good faith with the VA to find a resolution that will safeguard our VA students’ right to use their GI Bill benefits as they choose,” Clark said.