NEW YORK, July 09, 2019 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (Nasdaq: ASPU) ( “AGI”), an education technology holding company, today announced financial results for its 2019 fiscal fourth quarter ended April 30, 2019, highlighted by revenue of $10.2 million, representing a sequential increase of 20% and an increase of 41% year-over-year. Aspen Group also announced its full year results highlighted by record revenues of $34 million, an increase of 55% year-over-year, which are included in the consolidated financial statements at the end of this press release.

Michael Mathews, Chairman & CEO of Aspen Group, commented, “We delivered year-over-year enrollment growth of 36% in fiscal year 2019, but as a result of our business plan to drive the majority of enrollment growth in our highest LTV units (USU MSN-FNP and pre-licensure BSN program), the Company was able to increase its bookings by 90% from $34.8 million to $66.1 million. This sets the stage for sustained revenue growth and will expedite the achievement of our near-term goal of producing positive Adjusted EBITDA for fiscal year 2020.”

Fiscal Q4 2019 Highlights:

  • Revenue totaled $10,214,143, an increase of 41% as compared to the prior fiscal year fourth quarter;
  • Gross Profit totaled $5,683,536 or a 56% margin, a 62% increase as compared to the prior fiscal year fourth quarter;
  • Net Loss applicable to shareholders of ($1,609,923), as compared to Net Loss of ($3,664,485) in the prior fiscal year fourth quarter; Diluted net loss per share was $(0.09), as compared to a loss of $(0.24) in the prior fiscal year fourth quarter;
  • EBITDA, a non-GAAP financial measure, totaled a loss of $(731,852) for the quarter ended April 30, 2019;
  • Adjusted EBITDA, a non-GAAP financial measure, totaled $72,935 for the quarter ended April 30, 2019;
  • Cash used in operations totaled $2,785,464, as compared to $1,954,988 in the prior fiscal year fourth quarter.

Fiscal 2019 Fourth Quarter Financial and Operational Results:

Aspen Group, Inc. delivered 1,560 new student enrollments for the fiscal fourth quarter, a 23% increase year-over-year. Aspen University accounted for 1,243 new student enrollments (includes 113 Doctoral enrollments and 186 Pre-licensure BSN AZ campus enrollments). USU accounted for 317 new student enrollments (primarily Family Nurse Practitioner (“FNP”) enrollments), a 79% increase year-over-year. Enrollments for Aspen University’s Pre-Licensure BSN program increased 92% sequentially as the university began accepting enrollments for prerequisite students taking online courses in anticipation of entering the HonorHealth final two-year core campus program targeted to launch this upcoming September.

In the charts below, we have provided a full-year comparison of enrollments and bookings* from fiscal year 2018 to fiscal year 2019. Note that the company’s enrollments rose 36% year-over-year, however, the bookings increased 90% year-over-year. 

Growing enrollments by 36% year-over-year, yet achieving a 90% increase in bookings translates to a 39% average revenue per user (ARPU)* increase year-over-year, from $8,182 to $11,391. This result is why the company focused its growth spending on these three new business units during fiscal year 2019.

 Lifetime Value (LTV)FY'2018 FY'2018 FY'2019 FY'2019
 Per EnrollmentEnrollments Bookings Enrollments Bookings
AU Online (Nursing + Other) Unit$7,3503,858 $28,356,300 3,825 $28,113,750
AU (Doctoral) Unit$12,600116 $1,461,600 484 $6,098,400
AU (Pre-Licensure BSN) Unit$30,000- $- 433 $12,990,000
USU (FNP + Other) Unit$17,820280  $4,989,600 1,060 $18,889,200
Total 4,254 $34,807,500 5,802 $66,091,350
Average Revenue Per User (ARPU)   $8,182   $11,391

* Note: “Bookings” are defined by multiplying LTV by new student enrollments for each operating unit. “Average Revenue Per User or (ARPU)” is defined by dividing total bookings by total enrollments.

To view the Total Enrollments and Total Bookings bar graphs accompanying this announcement, please visit: https://www.globenewswire.com/NewsRoom/AttachmentNg/e67da1da-d9d0-438c-9eb3-84eb0497fd5d

AGI’s total active student body (includes both Aspen University and USU) grew 27% year-over-year from 7,057 to 8,932. Of the 8,932 total active students at both universities, 81% or 7,213 are degree-seeking Nursing students.

Aspen University’s total active degree-seeking student body grew 20% year-over-year from 6,500 to 7,784. Aspen’s School of Nursing grew 28% year-over-year, from 4,807 to 6,164 active students, which includes 396 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 19% year-over-year, from 4,532 to 5,404. Those 5,404 students paying through a monthly payment method represent 69% of Aspen University’s total active student body.

USU’s total active degree-seeking student body grew sequentially from 961 to 1,148 students or a sequential increase of 19%. Of the 1,148 total active students at USU, 970 or 84% are enrolled in the MSN-FNP degree program. USU students paying tuition and fees through a monthly payment method grew from 602 to 758 students sequentially. Those 758 students paying through a monthly payment method represent 66% of USU’s total active student body.

Revenues increased to $10,214,143, an increase of 41% as compared to the prior fiscal year fourth quarter. USU accounted for approximately 24% and Aspen University’s Pre-Licensure BSN program accounted for approximately 5% of overall Company revenues.

Gross profit increased to $5,683,536 or 56% gross margin. Aspen University gross profit represented 58% of Aspen University revenues for the fourth quarter, while USU gross profit equaled 55% of USU revenues during the fourth quarter. Aspen University instructional costs and services represented 17% of Aspen University revenues for the 2019 fourth quarter, while USU instructional costs and services equaled 25% of USU revenues during the 2019 fourth quarter. Aspen University marketing and promotional costs represented 21% of Aspen University revenues for the 2019 fourth quarter, while USU marketing and promotional costs equaled 19% of USU revenues during the 2019 fourth quarter.

Net loss applicable to shareholders was ($1,609,923) or diluted net loss per share of ($0.09). Aspen University generated $1.1 million of operating income for the fourth quarter, while USU experienced a net loss of ($0.51) million during the fourth quarter. Aspen Group corporate incurred $2.2 million of expenses for the fourth quarter.

EBITDA, a non-GAAP financial measure, was a loss of ($731,852) or (7%) as a percentage of revenue. Adjusted EBITDA, a non-GAAP financial measure, was $72,935 or 1% as a percentage of revenue. Aspen University generated $1.8 million of Adjusted EBITDA for the fourth quarter, while USU experienced an Adjusted EBITDA loss of ($0.1) million during the fourth quarter. Aspen Group corporate contributed $1.6 million of expenses toward the $72,935 Adjusted EBITDA result for the fourth quarter.

The company used cash of $2.8 million for operations in the fourth quarter, as compared to using $2.0 million in the prior fiscal year fourth quarter.

Conference Call:

Aspen Group, Inc. will host a conference call to discuss its fiscal year 2019 4th quarter financial results and business outlook on Tuesday, July 9th, 2019, at 4:30 p.m. (ET). 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 (844) 452-6823 (U.S.) or (731) 256-5216 (international), passcode 7459518. Subsequent to the call, a transcript of the audiocast will be available from the Company’s 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 7459518.

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 (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. 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 including non-recurring charges of $497,300 in 2019 and $764,253 in 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 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:

  For the Years Ended
April 30,		 
  2019  2018 
Net loss $(9,278,217) $(7,061,061)
Interest expense  441,961   1,860,391 
Taxes  9,276   — 
Depreciation & amortization  2,170,098   1,092,283 
EBITDA (loss)  (6,656,882)  (4,108,387)
Bad debt expense  854,008   535,366 
Acquisition expenses  —   828,566 
Non-recurring charges  497,300   764,253 
Stock-based compensation  1,190,385   642,566 
Adjusted EBITDA (Loss) $(4,115,189) $(1,337,636)


  For the Quarters Ended
April 30,		 
  2019  2018 
Net loss $(1,609,923) $(3,664,486)
Interest expense  285,437   1,504,701 
Depreciation & amortization  592,634   460,314 
EBITDA (Loss)  (731,852)  (1,699,471)
Bad debt expense  373,942   317,222 
Non-recurring charges  106,589   186,147 
Stock-based compensation  324,256   176,098 
Adjusted EBITDA (Loss) $72,935  $(1,020,004)

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, sustained revenue growth, achieving positive Adjusted EBITDA for fiscal year 2020 and the future impact of bookings. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” 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 10-K for the year ended April 30, 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.

Company Contact:

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


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  April 30,  April 30, 
  2019  2018 
Assets        
         
Current assets:        
Cash $9,519,352  $14,612,559 
Restricted cash  448,400   190,506 
Accounts receivable, net of allowance of $1,247,031 and $468,174, respectively  10,656,470   6,802,723 
Prepaid expenses  410,745   199,406 
Other receivables  2,145   184,569 
Total current assets  21,037,112   21,989,763 
         
Property and equipment:        
Call center equipment  193,774   140,509 
Computer and office equipment  327,621   230,810 
Furniture and fixtures  1,381,271   932,454 
Software  4,314,198   2,878,753 
   6,216,864   4,182,526 
Less accumulated depreciation and amortization  (1,825,524)  (1,320,360)
Total property and equipment, net  4,391,340   2,862,166 
Goodwill  5,011,432   5,011,432 
Intangible assets, net of accumulated amortization of $1,558,333 and 458,333, respectively  8,541,667   9,641,667 
Courseware, net  161,930   138,159 
Accounts receivable, secured - net of allowance of $625,963, and $625,963, respectively  45,329   45,329 
Long term contractual accounts receivable  3,085,243   1,315,050 
Debt issue cost, net  300,824   — 
Deposits and other assets  629,626   584,966 
         
Total assets $43,204,503  $41,588,532 

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

  April 30,  April 30, 
  2019  2018 
Liabilities and Stockholders’ Equity        
         
Current liabilities:        
Accounts payable $1,699,221  $2,227,214 
Accrued expenses  651,418   658,854 
Deferred revenue  2,456,865   1,814,136 
Refunds due students  1,174,501   815,841 
Deferred rent, current portion  47,436   8,160 
Convertible notes payable, current portion  50,000   1,050,000 
Other current liabilities  270,786   203,371 
Total current liabilities  6,350,227   6,777,576 
         
Convertible note payable  —   1,000,000 
Senior secured loan payable, net of discount of $353,328  9,646,672   — 
Deferred rent  746,176   77,365 
Total liabilities  16,743,075   7,854,941 
         
Commitments and contingencies - See Note 11        
         
Stockholders’ equity:        
Preferred stock, $0.001 par value; 1,000,000 shares authorized,        
0 issued and outstanding at April 30, 2019 and April 30, 2018  —   — 
Common stock, $0.001 par value; 40,000,000 shares authorized,        
18,665,551 issued and 18,648,884 outstanding at April 30, 2019        
18,333,521 issued and 18,316,854 outstanding at April 30,2018  18,666   18,334 
Additional paid-in capital  68,562,727   66,557,005 
Treasury stock (16,667 shares)  (70,000)  (70,000)
Accumulated deficit  (42,049,965)  (32,771,748)
Total stockholders’ equity  26,461,428   33,733,591 
         
Total liabilities and stockholders’ equity $43,204,503  $41,588,532 


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

  For the 
  Years Ended 
  April 30, 
  2019  2018 
         
Revenues $34,025,418  $22,021,512 
         
Operating expenses        
Cost of revenues (exclusive of depreciation and amortization shown separately below)  15,977,218   9,853,819 
General and administrative  24,987,828   16,328,580 
Depreciation and amortization  2,170,098   1,092,283 
Total operating expenses  43,135,144   27,274,682 
         
Operating loss  (9,109,726)  (5,253,170)
         
Other income (expense):        
Other income  276,189   149,761 
Gain on extinguishment of warrant liability  —   52,500 
Interest expense  (444,680)  (2,010,152)
Total other income (expense), net  (168,491)  (1,807,891)
         
Loss before income taxes  (9,278,217)  (7,061,061)
         
Income tax expense (benefit)  —   — 
         
Net loss $(9,278,217) $(7,061,061)
         
Net loss per share allocable to common stockholders - basic and diluted $(0.50) $(0.50)
         
Weighted average number of common shares outstanding: basic and diluted  18,409,459   14,215,868 


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED APRIL 30, 2019 AND APRIL 30, 2018

For the year ended April 30, 2019

        Additional        Total 
  Common Stock  Paid-In  Treasury  Accumulated  Stockholders' 
  Shares  Amount  Capital  Stock  Deficit  Equity 
Balance at April 30, 2018  18,333,521  $18,334  $66,557,005  $(70,000) $(32,771,748) $33,733,591 
                         
Stock-based compensation  —   —   1,190,385   —   —   1,190,385 
Common stock issued for cashless stock options exercised  111,666   112   (112)  —   —   — 
Common stock issued for stock options exercised for cash  56,910   56   128,145   —   —   128,201 
Common stock issued for cashless warrant exercise  119,594   120   (120)  —   —   — 
Common stock issued for warrants exercised for cash  43,860   44   99,956   —   —   100,000 
Warrants issued debt financing  —   —   615,587   —   —   615,587 
Warrants issued for services  —   —   1,713   —   —   1,713 
Purchase of treasury stock, net of broker fees  —   —       (7,370,000)  —   (7,370,000)
Re-sale of treasury stock, net of broker fees  —   —   —   7,370,000   —   7,370,000 
Fees associated with equity raise  —   —   (29,832)  —   —   (29,832)
Net loss, for the year ended April 30, 2019  —   —   —   —   (9,278,217)  (9,278,217)
Balance at April 30, 2019  18,665,551  $18,666  $68,562,727  $(70,000) $(42,049,965) $26,461,428 

For the year ended April 30, 2018

        Additional        Total 
  Common Stock  Paid-In  Treasury  Accumulated  Stockholders' 
  Shares  Amount  Capital  Stock  Deficit  Equity 
Balance at April 30, 2017  13,504,012  $13,504  $33,607,423  $(70,000) $(25,710,687) $7,840,240 
                         
Stock-based compensation  —   —   642,566   —   —   642,566 
Common stock issued for stock options exercised for cash  136,563   137   475,688   —   —   475,825 
Common stock issued for cashless warrant exercise  171,962   172   (172)  —   —   — 
Common stock issued for warrants exercised for cash  87,775   88   246,292   —   —   246,380 
Warrants issued with senior secured term loan  —   —   478,428   —   —   478,428 
Fees associated with equity raise  —   —   (2,215,730)  —   —   (2,215,730)
Restricted stock issued for services  10,000   10   88,689   —   —   88,699 
Common stock issued for acquisition  1,203,209   1,203   10,214,041   —   —   10,215,244 
Common stock issued in equity raise  3,220,000   3,220   23,019,780   —   —   23,023,000 
Net loss, for the year ended April 30, 2018  —   —   —   —   (7,061,061)  (7,061,061)
Balance at April 30, 2018  18,333,521  $18,334  $66,557,005  $(70,000) $(32,771,748) $33,733,591 


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

  For the  For the 
  Year ended  Year ended 
  April 30,  April 30, 
  2019  2018 
Cash flows from operating activities:        
Net loss $(9,278,217) $(7,061,061)
Adjustments to reconcile net loss to net cash used in operating activities:        
Bad debt expense  854,008   535,366 
Gain on extinguishment of warrant liability  —   (52,500)
Depreciation and amortization  2,170,098   1,092,283 
Stock-based compensation  1,190,385   642,566 
Warrants awarded to directors for service  1,713   — 
Loss on asset disposition  —   27,590 
Amortization and write-off origination fees  —   829,794 
Amortization of debt discounts  40,881   — 
Amortization of debt issue costs  54,247   — 
Cash paid to settle convertible debt  60,932   — 
Amortization of prepaid shares for services  8,285   80,415 
Changes in operating assets and liabilities:        
Accounts receivable  (6,477,948)  (3,360,277)
Prepaid expenses  (219,624)  (13,593)
Accrued interest receivable  —   (45,400)
Other receivables  182,424   (103,105)
Other assets  (44,660)  (528,549)
Accounts payable  (527,993)  1,319,268 
Accrued expenses  (7,436)  280,697 
Deferred rent  663,376   22,079 
Refunds due students  358,660   505,265 
Deferred revenue  642,729   (1,953)
Other liabilities  112,126   221,180 
Net cash used in operating activities  (10,216,014)  (5,609,935)
         
Cash flows from investing activities:        
Purchases of courseware and accreditation  (91,522)  (48,388)
Purchases of property and equipment  (2,531,521)  (1,836,618)
Notes receivable  —   900,000 
Cash paid in acquisition  —   (2,589,719)
Proceeds from promissory note interest receivable  —   53,400 
Net cash used in investing activities  (2,623,043)  (3,521,325)
         
Cash flows from financing activities:        
Repayment of convertible note payable  (2,000,000)  — 
Proceeds of equity offering  —   23,023,000 
Disbursements for equity offering costs  (29,832)  (2,215,730)
Proceeds from senior secured term loan  —   7,500,000 
Repayment of senior secured loan  —   (7,500,000)
Proceeds of stock options and warrants exercised  228,201   722,205 
Purchase of treasury stock  (7,370,000)  — 
Re-sale of treasury stock  7,370,000   — 
Offering costs paid on debt financing  (100,000)  (351,367)
Closing costs of senior secured loans  (33,693)  — 
Cash paid to settle convertible debt  (60,932)  — 
Proceeds of senior secured loan  10,000,000   — 
Net cash provided by financing activities  8,003,744   21,178,108 

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

  For the  For the 
  Year ended  Year ended 
  April 30,  April 30, 
  2019  2018 
Net increase (decrease) in cash and cash equivalents $(4,835,313) $12,046,848 
Cash, restricted cash, and cash equivalents at beginning of year  14,803,065   2,756,217 
Cash and cash equivalents at end of year $9,967,752  $14,803,065 
         
Supplemental disclosure cash flow information        
Cash paid for interest $118,217  $540,341 
Cash paid for income taxes $—  $— 
         
Supplemental disclosure of non-cash investing and financing activities        
Warrants issued as part of revolving credit facility $255,071  $— 
Warrants issued as part of senior secured term loans $360,516  $478,428 
Assets acquired net of liabilities assumed for non-cash consideration $—  $12,215,244 
Common stock issued for services $29,809  $88,699 

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

  For the  For the 
  Year ended  Year ended 
  April 30,  April 30, 
  2019  2018 
Cash $9,519,352  $14,612,559 
Restricted cash  448,400   190,506 
Total cash and restricted cash $9,967,752  $14,803,065 

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Total Enrollments and Total Bookings Bar Graphs

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