eCollegeSM Expects to Exceed Analysts Earnings Projections for Q2 Company Continues its Progress to Profitability
DENVER – June 7, 2001 – eCollegeSM [Nasdaq: ECLG], a leading provider of eLearning software and services to the higher educational market, announced today that it would exceed analysts’ earnings projections and meet analysts’ revenue projections for the second quarter of 2001.
“We are ahead of plan in reaching breakeven on a cash flow basis by the end of the year, and are well on our way to becoming the first eLearning vendor in the higher education market to reach profitability,” said Oakleigh Thorne, chairman and CEO of eCollege, during an interview on June 6 with CEOcast.com. “Financial stability is becoming increasingly important to customers as many well-known eLearning vendors are declaring bankruptcy, or simply closing their doors.”
According to Thorne, eCollege projects that it will meet analysts’ consensus revenue projections of $4.3 million for the second quarter, and will beat analysts’ consensus net loss projections of $4.5 million for the quarter by about 10 percent. This represents 60 percent revenue growth over the $2.7 million in SAB 101 revenue that eCollege posted in the second quarter of 2000, and a reduction of over 30 percent from the $6.1 million net loss it posted in that same period.
“We expect our EBITDA loss for the quarter to be less than $3 million, down from about $4.0 million for Q1 2001 and $5.5 million for Q4 2000,” said Thorne. “As a result of our reduced loss and our credit line from Silicon Valley Bank, we expect to end the quarter with approximately $17 million in available cash and credit, only slightly down from the $18.7 million we had at the end of the first quarter. We believe this is more than enough cash to fund us through to profitability.”
“Schools invest a significant amount of money in attracting students and building successful eLearning programs, and it’s important that they make this investment with a vendor who will be around in the future,” said Thorne. “That is why, unlike others in the industry who claim leadership by reporting customer counts and partnerships, our focus is on building quality customer relationships that ultimately drive revenue and profits. In the end, we believe those are the real determinants of long term viability and industry leadership.”
“It’s also important for customers to understand that we’re the largest player in eLearning for higher education, as measured by 2000 online learning revenue,” said Thorne. Thorne noted a report published by the Gartner Group in February 2001 that estimated that higher education spending on online learning solutions was $52 million in 2000.
Thorne continued, “our 2000 eLearning recognized revenue was the largest number counted in the $52 million, accounting for more than 25 percent of that number. This left more than nine other vendors scrambling to split the remaining market as measured by revenue.”
At the end of the first quarter 2001, eCollege had signed contracts with 222 institutions. The number of total course enrollments increased by 128
percent in the spring term, to more than 55,000. The number of courses
running increased by 128 percent to more than 4,000 in the spring term of 2001, compared to the spring term of 2000.
“Gartner projects that the market will grow to $74 million this year, representing 42 percent growth over last year. We project our 2001 revenue will grow approximately 60 percent over last year, so we feel that on a revenue basis we are gaining market share,” Thorne concluded.
eCollege [Nasdaq: ECLG] is an eLearning software and services provider. Comprised of educators and technologists, eCollege partners with colleges, universities, schools and corporations to design, build and support high quality learning communities. eCollege’s Educational Partners include such institutions as National University; Seton Hall University; University of Colorado; DeVry University, Inc.; Kentucky Virtual High School; and Microsoft Faculty Center. The company was founded in 1996 and is headquartered in Denver. For more information, visit eCollege.
The statements set forth above include forward-looking statements that involve risks and uncertainties, including those relating to the Company’s plans to reach break-even, the timing of reaching break-even, the cash available if and when the Company reaches break-even, the Company’s growth rate, and financial position and outlook for future results. 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 Company’s limited operating history, which makes it difficult to evaluate its business and prospects; the possibility that the market in which the Company operates, which is at an early stage, may not develop to the extent or at the rate the Company anticipates; 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 2000, which was filed on April 2, 2001. The forward-looking statements in this press release are made as of the day hereof and the Company assumes no obligation to update these forward-looking statements.
eCollege is a service mark of eCollege. All other trademarks or registered trademarks are the property of their respective owners.