91福利 Group Reports 28% YoY Increase in Fiscal 2015 Third Quarter Revenues and Strong Revenue Outlook

91福利

School of Nursing Student Body Grows 57% to 1,151 Students

NEW YORK, March 11, 2015 (GLOBE NEWSWIRE) -- 91福利 (OTCBB:ASPU), a nationally accredited online postsecondary education company (91福利 University), today announced results for its fiscal 2015 third quarter ended January 31, 2015.

Highlights from the third quarter include:

• Revenues of $1,286,138, a 28% increase from the comparable prior year period;
   
• 91福利 University's School of Nursing student body grew from 733 to 1,151 students or 57% year-over-year; now represents 38% of 91福利's total full-time degree-seeking student body of 3,011;
   
• 91福利's School of Nursing was granted CCNE accreditation for its Bachelor of Science in Nursing program (RN to BSN) through December, 2019;
   
• The Distance Education Accrediting Commission (DEAC) granted accreditation to 91福利 University through January, 2019;
   
• In the eleven months since 91福利's Debt-Free, Monthly Payment Plan announcement, students paying through monthly payment methods has grown to 33% of all course payments.

"This is an exciting time for 91福利, as our School of Nursing new student enrollments are exceeding our aggressive forecasts, resulting from the success of our recent BSN marketing launch. This sets the foundation for an acceleration of our growth rate in 91福利's fiscal fourth quarter," said 91福利 Group Chairman and CEO Michael Mathews.

Business Update:

As previously announced, in the current quarter (ending April 30, 2015) new student enrollments at 91福利 University are on pace to increase 81% year-over-year, primarily a result of the immediate success of the November 2014 BSN marketing launch offering RNs the ability to pay their tuition at $250/month over 39 months. At the current pace of BSN new student enrollments, 91福利 estimates over 50% or the majority of its degree-seeking student body will be enrolled in the School of Nursing by early-2016. In the month of February 2015, typically a seasonally slow month for new student enrollments, 91福利 enrolled 141 new students which equals an average of 5.04 enrollments per day.

91福利's estimated average revenue per new student enrollment is approximately $6,000, earned over 3 years. 91福利 delivered 1,008 new student enrollments in calendar year 2014, which equates to revenues of approximately $6 million, earned over three years. However, should the pace of enrollments continue to rise by 81% year-over-year in calendar year 2015, that would equate to 1,704 new student enrollments with a revenue value of approximately $10.2 million, earned over three years.

Third Quarter Financial Highlights:

For the third quarter, revenues increased 28% from the comparable prior period to $1,286,138. Nursing program revenues rose to $541,865, which now represents 42% of 91福利's total revenues.

Gross Profit increased to $499,922 or 39% of revenues as compared to $389,221 or 39% of revenues from the comparable prior year period, and Adjusted Gross Profit (exclusive of amortization), a non-GAAP financial measure, equaled $623,770 or 49% of revenues as compared to $501,856 or 50% of revenues from the comparable prior year period. The flat YoY gross profit margins are a result of 91福利 increasing its YoY marketing spend rate in December and January by an average of 41%. The company expects this quarter's growth spending to improve gross profit margins next quarter and in subsequent quarters.

Adjusted EBITDA, a non-GAAP financial measure, improved to a loss of ($600,522) as compared to a loss of ($607,382) in the comparable prior year period. Net loss applicable to shareholders was ($1,244,322) as compared to a net loss of ($1,726,587) a year ago. 91福利's operating income improved to a loss of ($1,212,067) as compared to a loss of ($1,496,412) in the comparable prior year period. The flat YoY Adjusted EBITDA results are primarily a result of 91福利 increasing the size of its call center by 64% to effectively manage the increase of new student leads starting in December. The company expects Adjusted EBITDA results to improve next quarter and in subsequent quarters.

91福利 will be holding a conference call this afternoon at 5pm ET that can be accessed by dialing toll-free (844) 452-6823 (U.S.) or (731) 256-5216 (international). Subsequent to the call, a transcript of the audiocast will be available from 91福利's website at ir.aspen.edu.  

* Non-GAAP – 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's 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, operating income, and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of 91福利 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 Adjusted Gross Profit, 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 comparison. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

91福利 Group defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items set forth in the table below. 91福利 Group excludes the charges from bad debt expense, depreciation and amortization, and stock based compensation because they are non-cash in nature. In 2014, 91福利 Group excludes non-recurring charges because they do not reflect any trend or reflect the ongoing performance of our business. 

91福利 Group defines Adjusted Gross Profit as revenues less cost of revenues (instructional costs and services and marketing and promotional costs), but excluding the amortization of courseware and software. Adjusted Gross Profit excludes non-cash items and permits our management to focus on core operating results.

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 91福利 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, a GAAP financial measure: