Aspen Group Reports Record Revenues of $8.5 Million and 49% Revenue Growth in Third Quarter of Fiscal 2019

51吃瓜网

AGI鈥檚 New Business Units, USU and Aspen University鈥檚 Pre-Licensure BSN Program, Grow to 25% of Company Revenues

NEW YORK, March 11, 2019 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (Nasdaq: 51吃瓜网)( 鈥淎GI鈥�), an education technology holding company, today announced financial results for its 2019 fiscal third quarter ended January 31, 2019, highlighted by record revenue of $8,494,627, an increase of 49% compared to the third quarter of fiscal year 2018.听

Michael Mathews, Chairman & CEO of Aspen Group, commented, 鈥淥ur two new business units, United States University, Inc. (鈥淯SU鈥�) and Aspen University鈥檚 Pre-Licensure BSN program, continue to grow rapidly as they accounted for 25% of the overall revenues of the Company this quarter. This trend is expected to continue, and we now estimate these business units to grow to approximately 40% of our overall revenues by the end of fiscal year 2020.鈥�

Fiscal Q3 2019 Highlights:

• Revenue totaled $8,494,627 an increase of 49% as compared to the prior fiscal year third quarter;
• Gross Profit totaled $4,221,939 or a 50% margin, a 46% increase as compared to the prior fiscal year third quarter;
• Net Loss applicable to shareholders of ($2,355,940), as compared to Net Loss of ($2,147,945) in the prior fiscal year third quarter; Diluted net loss per share was $(0.13), as compared to a loss of $(0.15) in the prior fiscal year third quarter;
• EBITDA, a non-GAAP financial measure, totaled a loss of $(1,726,399);
• Adjusted EBITDA, a non-GAAP financial measure, totaled a loss of $(1,105,209);
• Cash used in operations totaled $1,943,127, as compared to $2,099,213 last quarter, a sequential improvement of $156,086 or 7%.

In reviewing these comparisons, investors should note AGI acquired USU and all its operating expenses on December 1, 2017. For the third quarter, revenues were $8,494,627, an increase of 49% as compared to the prior fiscal year third quarter. USU revenues contributed approximately 21% of the quarterly revenues for the Company as compared to 19% in the previous quarter.

Fiscal 2019 Third Quarter Financial and Other Results:

AGI delivered 1,363 new student enrollments in the third quarter, as compared to 972 new student enrollments in the prior year, an increase of 40% year-over-year.听 Aspen University accounted for 1,112 new student enrollments (includes 120 Doctoral enrollments and 97 Pre-licensure BSN AZ campus enrollments), while USU accounted for 251 new student enrollments (primarily Family Nurse Practitioner (鈥淔NP鈥�) enrollments).

AGI鈥檚 overall active student body (includes both Aspen University and USU) grew 28% year-over-year from 6,512 to 8,354. Aspen University鈥檚 total active degree-seeking student body grew 22% year-over-year from 6,066 to 7,393. Aspen鈥檚 School of Nursing grew 30% year-over-year, from 4,401 to 5,718 active students, which includes 210 active students in the BSN Pre-Licensure program in Phoenix, AZ.

Aspen University students paying tuition and fees through a monthly payment method grew by 25% year-over-year, from 4,194 to 5,259. Those 5,259 students paying through a monthly payment method represent 71% of Aspen University鈥檚 total active student body. USU鈥檚 total active degree-seeking student body grew sequentially from 843 to 961 students or a sequential increase of 14%. USU students paying tuition and fees through a monthly payment method grew from 514 to 602 students sequentially. Those 602 students paying through a monthly payment method represent 63% of USU鈥檚 total active student body.

Revenues increased to $8,494,627, an increase of 49% as compared to the prior fiscal year third quarter. USU accounted for approximately 21% and Aspen University鈥檚 Pre-Licensure BSN program accounted for approximately 5% of overall Company revenues.

Gross profit increased to $4,221,939 or 50% gross margin. Aspen University gross profit represented 54% of Aspen University revenues for the third quarter, while USU gross profit equaled 45% of USU revenues during the third quarter. Aspen University instructional costs and services represented 18% of Aspen University revenues for the 2019 third quarter, while USU instructional costs and services equaled 30% of USU revenues during the 2019 third quarter. Aspen University marketing and promotional costs represented 25% of Aspen University revenues for the 2019 third quarter, while USU marketing and promotional costs equaled 25% of USU revenues during the 2019 third quarter.

Net loss applicable to shareholders was ($2,355,940) or diluted net loss per share of ($0.13). Aspen University generated $0.4 million of net income for the third quarter, while USU experienced a net loss of ($0.9) million during the third quarter. Aspen Group corporate incurred $1.8 million of expenses for the third quarter.

EBITDA, a non-GAAP financial measure, was a loss of ($1,726,399) or (20%) as a percentage of revenue. Adjusted EBITDA, a non-GAAP financial measure, was a loss of ($1,105,209) or (13%) as a percentage of revenue. Aspen University generated $0.9 million of Adjusted EBITDA for the third quarter, while USU experienced an Adjusted EBITDA loss of ($0.5) million during the third quarter. Aspen Group corporate contributed $1.5 million toward the ($1,105,209) Adjusted EBITDA loss for the third quarter.

The company used cash of $1.9 million for operations in the third quarter, as compared to using $2.1 million last quarter, a sequential improvement of $156,086 or 7%.

Conference Call:

Aspen Group, Inc. will host a conference call to discuss its fiscal year 2019 3rd quarter financial results and business outlook on Monday, March 11th, 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 7082258. 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 7 day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 or (404) 537-3406 (international), passcode 7082258.

Non-GAAP 鈥� Financial Measures:

This press release includes both financial measures in accordance with 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 Aspen Group 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 the following 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.

Aspen Group defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below. Aspen Group excludes these expenses because they are non-cash or non-recurring in nature.

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 Aspen Group 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 Adjusted EBITDA to net loss allocable to common shareholders, a GAAP financial measure:

About Aspen Group, Inc.:

Aspen Group, 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 including future growth of our new business units. 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 demand of nursing students for the new programs, potential student attrition and national and local economic factors. Other risks are included in our filings with the SEC including our Form S-3, our Prospectus Supplement filed April 19, 2018 and our Form 10-K for the year ended April 30, 2018. 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.

Company Contact:

Aspen Group, Inc.
Michael Mathews, CEO
914-906-9159

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

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 STATEMENT OF CHANGES IN STOCKHOLDERS鈥� EQUITY
FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2019 AND 2018
(Unaudited)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS鈥� EQUITY (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED JANUARY 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 consolidated balance sheet that sum to the total of the same such amounts shown in the consolidated statement of cash flows:

Released March 11, 2019