Aspen Group Announces Preliminary Fourth Quarter Revenue of $2.5 Million, Delivering Over 61% Growth YoY and Over 15% Sequentially
OREANDA-NEWS. Aspen Group, Inc. (OTCQB:ASPU), a nationally accredited online postsecondary education company (Aspen University), today pre-announced that revenues for the unaudited Q4’16 Fiscal Quarter ending April 30, 2016 were approximately $2.5 million, which would represent an increase of over 61% year-over-year and over 15% sequentially.
Aspen estimates preliminary unaudited Fiscal Q4’16 net loss was approximately $240,000 which would represent over a 64% sequential improvement, and Adjusted EBITDA, a Non-GAAP Financial Measure to be at least $120,000 which would represent over a 168% sequential improvement. This is the first fiscal quarter with positive Adjusted EBITDA, and the 5% margin or better beats the prior company guidance of breaking even on an Adjusted EBITDA basis.
Note the chart below reflects that Aspen is also estimating a near breakeven result for the fourth quarter on an EBITDA basis (loss of less than $50,000).
|Q4 FY'16||Q3 FY'16||Q/o/Q Improvement|
|Revenue||> $2,500,000||$||2,164,031||> 15%|
|Net Income (Loss)||< $(240,000||)||$||(674,964||)||> 64%|
|EBITDA||< $(50,000||)||$||(490,628||)||> 90%|
|-Stock Compensation||~$85,000||$||94,670||~ 10%|
|-Non-Recurring Expenses||~$65,000||$||147,681||~ 56%|
|-Bad Debt Expense||~$20,000||$||71,489||~ 72%|
|Adjusted EBITDA||> $120,000||$||(176,788||)||> 168%|
Aspen’s School of Nursing student body grew by 315 students in the quarter, from 2,307 to 2,622 students. That represented 78% of the growth of Aspen’s full-time degree seeking student body, from 4,412 to 4,818. Aspen’s School of Nursing now accounts for 54% of Aspen’s full-time degree seeking student body.
Aspen’s RN to BSN degree program is responsible for the majority of the university’s growth, increasing by 246 students in the quarter which represented 61% of Aspen’s overall student body growth in the quarter. As previously announced, Aspen does not offer federal financial aid for its RN to BSN program, even though all other degree-seeking programs are currently eligible. Registered Nurses instead have adopted Aspen’s debtless education solution en masse, simply paying their tuition via a monthly payment plan of $250/month for 39 months, interest free.
At fiscal year ending April 30, 2016, Aspen had 1,855 degree-seeking students paying for their education through one of Aspen’s monthly payment programs, representing contractual value over $12 million. Aspen’s total monthly payment students grew by 260 students in the quarter, and in the month of April monthly payment students represented 56% of all course payments.
In Q4 FY’16, Aspen set a quarterly enrollment record with 572 new student enrollments, as compared to 444 new student enrollments in the prior year, an increase of 29% year-over-year.
“We finished the fiscal year with an exceptional fourth quarter that exceeded our expectations across all key metrics, including achieving positive Adjusted EBITDA well beyond our breakeven forecast. This achievement of delivering outstanding top line growth while generating increasing operating leverage underscores the strength of our business model,” said Chairman & CEO, Michael Mathews.
Balance Sheet Strengthens Prior to Fiscal Year End
Aspen Group, Inc. strengthened its balance sheet prior to its April 30 fiscal year end, through a warrant conversion offering in which Aspen received gross proceeds of approximately $752,500. No additional warrants were issued to those warrant holders who converted. Additionally, Aspen’s Chairman & CEO, Michael Mathews, converted a $300,000 note to equity above market at $0.19/share. As a result of these transactions and other transactions, the Company’s stockholders equity increased to above $1.75 million. Consequently, Aspen anticipates passing the Department of Education’s Composite Score of 1.5 for a second year in a row.
About Aspen Group, Inc. (OTCQB:ASPU)
Aspen Group, Inc. is an online postsecondary education company. Aspen University’s mission is to offer any motivated college-worthy student the opportunity to receive a high-quality, responsibly priced distance-learning education for the purpose of achieving sustainable economic and social benefits for themselves and their families. Aspen is dedicated to providing the highest quality education experiences taught by top-tier faculty – 56 percent of our adjunct faculty hold doctoral degrees.