eCollege(SM) Announces Record Revenues of $5.6 Million
480 Percent Increase in Gross Margin Supports Scalable Business Model
DENVER – May 8, 2002 – eCollege(SM) [Nasdaq: ECLG], the leading provider of technology and services for online higher education programs, today announced it achieved record revenues for the first quarter ending March 31, 2002. Revenue for the first quarter increased 33 percent to $5.6 million, from $4.2 million for the first quarter of 2001. The net loss for the first quarter was $1.8 million, compared to a net loss of $4.9 million for the same period last year.
The net loss per share for the quarter was $0.11, calculated on an average of 16.3 million shares. This compares to a net loss per share of $0.30, on an average of 16.1 million shares for the same quarter last year. The Company’s first quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was negative $570 thousand, a significant improvement over last year’s negative $4.0 million for the same period.
“We expect 50 percent growth in distance student enrollments this semester compared to last year’s spring semester, and believe this will help drive continued revenue growth and anticipated profitability later this year,” said Oakleigh Thorne, chairman and CEO of eCollege. “Our cash remains very strong, and our large customers are enthusiastic about their online program’s revenue growth and profitability.”
Revenue from student fees for the quarter increased 51 percent from the same period last year, and represents 74 percent of total revenue for the quarter. Gross margin for the quarter improved significantly to $2.5 million, or 45 percent of revenue, compared to a gross margin of $430 thousand, or 10 percent of revenue, for the same quarter last year.
The Company’s cash and cash equivalents decreased by $790 thousand during the first quarter to $15.8 million, reflecting $1.0 million used in operating activities. On March 31, 2002, total assets were $27.1 million, deferred revenue was $4.2 million, the Company’s outstanding line of credit was $3 million, and shareholders’ equity totaled $13.2 million.
The following are highlights from eCollege’s first quarter:
· eCollege successfully launched eCollege AU(SM), which provides a unique feature set – such as synchronous tools, customization capabilities and access for the disabled – not available through any other course management system.
· For the 2002 spring academic term, which impacts both the first and second quarter, the total number of student enrollments is expected to be more than 120,000, compared to approximately 65,000 enrollments for the 2001 spring term. More than 85,000 of the spring 2002 enrollments represent distance student enrollments, up from 59,000 distance enrollments last spring.
· eCollege signed 10 new customers, bringing its total number of customers to 257. Additionally, the company completed 25 significant up-sales to existing customers.
· The number of distance courses running this spring academic term is expected to be more than 5,500, an increase of more than 50 percent, compared with the spring term of 2001.
· eCollege announced it is offering free on-campus eLearning solutions to current and prospective customers that commit to enrolling large numbers of students in their distance learning programs.
· eCollege hired two academic and technology leaders: Dr. Edward Gould joined as vice president of Academic and Government Affairs; and Mark Resmer joined as chief technology officer.
· Building on its accessibility initiative, eCollege announced its participation in the federal “Buy Accessible” program, and new services to evaluate and upgrade an institution’s online course content and websites to meet Section 508 federal accessibility guidelines.
eCollege will hold a conference call to discuss first quarter results for 2002 at 1:00 p.m. Eastern Time on May 8, 2002. Interested parties can listen to the conference call live on the Internet by going to the investor relations section of eCollege’s website at www.eCollege.com and clicking on the “Live Webcast” link. Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.
For those unable to listen at the designated time, the archived Webcast will be available on eCollege’s website through May 22, 2002. A conference call replay will also be available from approximately 4:00 p.m. Eastern Time on May 8, 2002 until midnight Eastern Time on May 14, 2002. To listen to the replay, participants should dial 800-642-1687. The confirmation ID is: 3948498
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; 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; disruptions to operations and negative accounting charges that could occur if the Company decided to pursue an acquisition; technological developments, emerging industry standards and customer requirements, which continually require the Company to improve its software and services. 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 and eCollege AU are service marks of eCollege. All other trademarks or registered trademarks are the property of their respective owners.
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