eCollege(SM) Announces Better than Expected Results for the Third Quarter
For Immediate Release
For Information Contact
eCollege(SM) Announces Better than Expected Results for the Third Quarter,
and New Guidance for the Fourth Quarter
Company Anticipates Positive EBITDA for the Second Half of 2002, Above Original Estimates
DENVER – September 10, 2002 – eCollege(SM) [Nasdaq: ECLG], the leading provider of technology and services for online higher education programs, today announced updated guidance for the third quarter 2002, and new guidance for the fourth quarter 2002 based on a recently completed internal re-forecast. Speaking at the Gerard Klauer Mattison Education Conference today in New York, Doug Kelsall, EVP and CFO of eCollege, will review the Company’s expected results. He will announce:
· EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the third quarter will run between positive $100,000 and $300,000, ahead of earlier guidance of breakeven to slightly positive EBITDA for the third quarter.
· Revenue will be between $6.0 and $6.1 million, at the high end of the $5.9 to $6.1 million range originally projected for the third quarter.
· Positive EBITDA of $200,000 to $400,000 in the fourth quarter with revenue in the $6.0 to $6.2 million range.
“Achieving positive EBITDA results for the second half of the year will mark a tremendous milestone in the eLearning industry,” said Doug Kelsall, executive vice president and CFO of eCollege. “Our customers’ growth, coupled with our ability to control expenses while continuing to invest in product development activity, has contributed to the improvement in our financial results over the last eight quarters. Our cash position remains strong, and we believe our trend toward sustained EBITDA positive operations demonstrates our long term financial viability.”
The company announced a record summer term of 66,000 student enrollments, up from 31,000 enrollments for the summer 2001 term. Approximately 52,000 of these summer 2002 enrollments represent distance students. Early fall enrollments also look strong, and the company is projecting a record term of approximately 145,000 student enrollments, compared to 96,000 enrollments for the fall term in 2001. Approximately 80,000 of the 2002 fall enrollments projected represent distance students.
Kelsall also announced the following expectations for the third quarter results:
· Total expenses of $7.0 to $7.2 million, compared to the $7.0 to $7.4 million the company originally projected, resulting in a projected net loss of $900,000 to $1.1 million, compared to a net loss of $1.0 to $1.4 million the company previously projected. The company lost $2.4 million in the third quarter of 2001.
· Cash balances of $12.0 to $13.0 million, which is at the high end of the cash balance originally projected of $10.0 to $12.0 million, both including a $2.8 million draw on its available line of credit.
· Non-cash expenses of $1.1 million to $1.2 million.
Oakleigh Thorne, chairman and CEO, and Mr. Kelsall have certified the company’s financial statements recently filed with the SEC on time and without changes. “Since becoming a public company in 1999, accurate and timely financial reporting has been a priority. We had no hesitancy about certifying our financial results,” added Kelsall.
eCollege [Nasdaq: ECLG] is the leading eLearning technology and services provider to educational markets. eCollege designs, builds and supports high quality online degree, certificate/diploma and professional development programs for colleges, universities, school districts and state departments of education. eCollege’s clients include such institutions as National University; University of Massachusetts Amherst; University of Colorado; Drexel University; DeVry University, Inc.; New England College of Finance; and the Kentucky Virtual High School. The company was founded in 1996 and is headquartered in Denver. For more information, visit www.eCollege.com.
The statements set forth above include forward-looking statements that involve risks and uncertainties, including those relating to the Company’s financial outlook for future periods, including revenue, operating losses, EBITDA, expenses, and financial position and outlook for future results including profitability. The Company wishes to advise readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include: the difficulty in predicting future growth due to the undeveloped and rapidly changing market for our products and services; our customers’ ability to achieve successful online programs; our ability to control expenses; the market for online learning in higher education is in an early stage and may not continue to develop; the possibility that we may not be able to achieve continued growth or maintain current levels of revenue; the Company’s lengthy sales cycle; substantial and increasing competition in the online education market; and technological developments, emerging industry standards and customer requirements, which continually require the Company to improve its software and services, which could lead to increased costs and expenses. These and other factors, which could cause actual results to differ materially, are also discussed in the Company’s filings with the SEC, including its form 10-K for 2001, which was filed on March 28, 2002. The forward-looking statements in this press release are made as of the day hereof and the Company assumes no obligation to update their forward-looking statements.
eCollege is a service mark of eCollege. All other trademarks or registered trademarks are the property of their respective owners.
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