UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
( | ||
(Address of Principal Executive Offices) | (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
New York Stock Exchange ( |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer ◻ | ||
Non-accelerated filer ◻ | Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 15, 2022, the Registrant had
Stride, Inc.
Form 10-Q
For the Quarterly Period Ended March 31, 2022
Index
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3 | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 41 | |
49 | ||
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50 | ||
50 | ||
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50 | ||
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51 |
2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, | June 30, | |||||
| 2022 |
| 2021 | |||
(audited) | ||||||
(In thousands except share and per share data) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | | $ | | ||
Accounts receivable, net of allowance of $ | | | ||||
Inventories, net | | | ||||
Prepaid expenses | | | ||||
Other current assets | | | ||||
Total current assets | | | ||||
Operating lease right-of-use assets, net | | | ||||
Property and equipment, net | | | ||||
Capitalized software, net | | | ||||
Capitalized curriculum development costs, net | | | ||||
Intangible assets, net | | | ||||
Goodwill | | | ||||
Deposits and other assets | | | ||||
Total assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable | $ | | $ | | ||
Accrued liabilities | | | ||||
Accrued compensation and benefits | | | ||||
Deferred revenue | | | ||||
Current portion of finance lease liability | | | ||||
Current portion of operating lease liability | | | ||||
Total current liabilities | | | ||||
Long-term finance lease liability | | | ||||
Long-term operating lease liability | | | ||||
Long-term debt | | | ||||
Deferred tax liability | | | ||||
Other long-term liabilities | | | ||||
Total liabilities | | | ||||
Commitments and contingencies | ||||||
Stockholders’ equity | ||||||
Preferred stock, par value $ | ||||||
Common stock, par value $ | | | ||||
Additional paid-in capital | | | ||||
Accumulated other comprehensive income (loss) | ( | ( | ||||
Retained earnings | | | ||||
Treasury stock of | ( | ( | ||||
Total stockholders’ equity | | | ||||
Total liabilities and stockholders' equity | $ | | $ | | ||
See accompanying notes to unaudited condensed consolidated financial statements.
3
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||
(In thousands except share and per share data) | |||||||||||||
Revenues | $ | | $ | | $ | | $ | | |||||
Instructional costs and services | | | | | |||||||||
Gross margin | | | | | |||||||||
Selling, general, and administrative expenses | | | | | |||||||||
Income from operations | | | | | |||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||
Other income, net | | | | | |||||||||
Income before income taxes and income from equity method investments | | | | | |||||||||
Income tax expense | ( | ( | ( | ( | |||||||||
Income from equity method investments | | | | | |||||||||
Net income attributable to common stockholders | $ | | $ | | $ | | $ | | |||||
Net income attributable to common stockholders per share: | |||||||||||||
Basic | $ | | $ | | $ | | $ | | |||||
Diluted | $ | | $ | | $ | | $ | | |||||
Weighted average shares used in computing per share amounts: | |||||||||||||
Basic | | | | | |||||||||
Diluted | | | | |
See accompanying notes to unaudited condensed consolidated financial statements.
4
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||
(In thousands) | |||||||||||||
Net income | $ | | $ | | $ | | $ | | |||||
Other comprehensive income (loss), net of tax: | |||||||||||||
Foreign currency translation adjustment | | ( | | ( | |||||||||
Comprehensive income attributable to common stockholders | $ | | $ | | $ | | $ | |
See accompanying notes to unaudited condensed consolidated financial statements.
5
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Stride, Inc. Stockholders' Equity | ||||||||||||||||||||||
(In thousands except share data) | Common Stock | Additional | Accumulated Other | Retained | Treasury Stock | |||||||||||||||||
| Shares |
| Amount |
| Capital |
| Income (Loss) |
| Earnings |
| Shares |
| Amount |
| Total | |||||||
Balance, June 30, 2021 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | | ||||||||
Adjustment related to new convertible debt guidance | — | — | ( | — | | — | — | ( | ||||||||||||||
Net loss | — | — | — | — | ( | — | — | ( | ||||||||||||||
Foreign currency translation adjustment | — | — | — | | — | — | — | | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | | — | | — | — | — | — | | ||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, September 30, 2021 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | | ||||||||
Net income | — | — | — | — | | — | — | | ||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | — | — | ( | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | — | — | — | — | — | — | — | — | ||||||||||||||
Vesting of performance share units, net of tax withholding | | — | — | — | — | — | — | — | ||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, December 31, 2021 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | | ||||||||
Net income | — | — | — | — | | — | — | | ||||||||||||||
Foreign currency translation adjustment | — | — | — | | — | — | — | | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | | — | | — | — | — | — | | ||||||||||||||
Vesting of deferred stock units | | — | ||||||||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, March 31, 2022 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | |
6
Stride, Inc. Stockholders' Equity | ||||||||||||||||||||||
(In thousands except share data) | Common Stock | Additional | Accumulated Other | Retained Earnings (Accumulated | Treasury Stock | |||||||||||||||||
| Shares |
| Amount |
| Capital |
| Income (Loss) |
| Deficit) |
| Shares |
| Amount |
| Total | |||||||
Balance, June 30, 2020 | | $ | | $ | | $ | | $ | | ( | $ | ( | $ | | ||||||||
Adjustment related to new credit losses guidance | — | — | — | — | ( | — | — | ( | ||||||||||||||
Net income | — | — | — | — | | — | — | | ||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | — | — | ( | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | | — | | — | — | — | — | | ||||||||||||||
Withholding of stock options for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Equity component of convertible senior notes, net of issuance costs and taxes | — | — | | — | — | — | — | | ||||||||||||||
Purchases of capped calls in connection with convertible senior notes | — | — | ( | — | — | — | — | ( | ||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, September 30, 2020 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | | ||||||||
Net income | — | — | — | — | | — | — | | ||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | — | — | ( | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | | — | | — | — | — | — | | ||||||||||||||
Equity component of convertible senior notes, net of issuance costs and taxes | — | — | | — | — | — | — | | ||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, December 31, 2020 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | | ||||||||
Net income | — | — | — | — | | — | — | | ||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | — | — | ( | ||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | | ||||||||||||||
Exercise of stock options | | — | | — | — | — | — | | ||||||||||||||
Issuance of restricted stock awards | | — | — | — | — | — | — | — | ||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | ||||||||||||||
Repurchase of restricted stock for tax withholding | ( | — | ( | — | — | — | — | ( | ||||||||||||||
Balance, March 31, 2021 | | $ | | $ | | $ | ( | $ | | ( | $ | ( | $ | |
See accompanying notes to unaudited condensed consolidated financial statements.
7
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, | ||||||
| 2022 |
| 2021 | |||
(In thousands) | ||||||
Cash flows from operating activities | ||||||
Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization expense | | | ||||
Stock-based compensation expense | | | ||||
Deferred income taxes | | | ||||
Provision for doubtful accounts | | | ||||
Amortization of discount and fees on debt | | | ||||
Noncash operating lease expense | | | ||||
Other | | | ||||
Changes in assets and liabilities: | ||||||
Accounts receivable | ( | ( | ||||
Inventories, prepaid expenses, deposits and other current and long-term assets | | ( | ||||
Accounts payable | ( | ( | ||||
Accrued liabilities | ( | | ||||
Accrued compensation and benefits | ( | | ||||
Operating lease liability | ( | ( | ||||
Deferred revenue and other liabilities | | | ||||
Net cash provided by operating activities | | | ||||
Cash flows from investing activities | ||||||
Purchase of property and equipment | ( | ( | ||||
Capitalized software development costs | ( | ( | ||||
Capitalized curriculum development costs | ( | ( | ||||
Sale of long-lived assets | — | | ||||
Sale of other investments | | — | ||||
Acquisition of MedCerts, LLC, net of cash acquired |