Grand Canyon Education, Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the Nasdaq Global Market under the symbol “LOPE.” The holders of our common stock are entitled to one vote per share on any matter to be voted upon by stockholders. All shares of common stock rank equally as to voting and all other matters. The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, are not liable for further call or assessment and are not entitled to cumulative voting rights. Holders As of December 31, 2020, there were approximately 152 registered holders of record of common stock. A substantially greater number of holders of common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions. Dividends We currently do not anticipate paying cash dividends on our common stock in the foreseeable future. Recent Sales of Unregistered Securities None. Securities Authorized for Issuance under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K is provided under Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, “Equity Compensation Plan Information,” which is incorporated herein by reference. Purchases of Equity Securities by the Issuer and Affiliated Purchasers In July 2020, December 2020 and January 2021, our Board of Directors increased the authorization under its existing stock repurchase program by $50.0 million, $100.0 million and $100.0 million, respectively, reflecting an aggregate authorization for share repurchases since the initiation of our program of $500.0 million. The current expiration date on the repurchase authorization by our Board of Directors is December 31, 2021. Repurchases occur at GCE’s discretion and GCE may modify, suspend or discontinue the repurchase authorization at any time. Repurchases may be made in the open market or in privately negotiated transactions, pursuant to the applicable SEC rules. The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant. Since the initial approval of our share repurchase plan, we have purchased 5,578,141 shares of common stock at an aggregate cost of $251.7 million, which purchases are recorded at cost in the accompanying December 31, 2020 consolidated balance sheet and statement of stockholders’ equity. At December 31, 2020, there remained $148.3 million available under our current share repurchase authorization (which authorization was increased to $248.3 million in January 2021). During the fourth quarter and the year ended December 31, 2020, GCE repurchased 437,544 and 1,601,788 shares of common stock, respectively, at an aggregate cost of $36.7 million and $129.0 million, respectively. 43 Table of Contents The following table sets forth our share repurchases of common stock and our share repurchases in lieu of taxes, which are not included in the repurchase plan totals as they were effected in conjunction with the vesting of restricted share awards, during each period in the fourth quarter of fiscal 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Maximum Dollar ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ Value of Shares ​ ​ ​ ​ Average ​ Part of Publicly ​ That May Yet Be ​ ​ Total Number of ​ Price Paid ​ Announced ​ Purchased Under Period ​ Shares Purchased ​ Per Share ​ Program ​ the Program Share Repurchases ​ ​ October 1, 2020 – October 31, 2020 184,486 ​ $ 81.66 184,486 ​ $ 69,900,000 November 1, 2020 – November 30, 2020 197,400 ​ $ 84.85 197,400 ​ $ 53,200,000 December 1, 2020 – December 31, 2020 55,658 ​ $ 88.32 55,658 ​ $ 148,300,000 Total 437,544 ​ $ 83.95 437,544 ​ $ 148,300,000 Tax Withholdings ​ ​ October 1, 2020 – October 31, 2020 — ​ $ — — ​ $ — November 1, 2020 – November 30, 2020 — ​ $ — — ​ $ — December 1, 2020 – December 31, 2020 — ​ $ — — ​ $ — Total — ​ $ — — ​ $ — ​ GCE Stock Performance The following graph compares the cumulative total return of our common stock with the cumulative total returns of the S&P 500 Index and our education services peer group of seven companies that includes: Wiley Education Services, Pearson plc., CHEGG, Inc., Laureate Education, Inc., Strategic Education, Inc., Adtalum Global Education, Inc, and 2U, Inc. This chart assumes that an investment of $100 was made in our common stock, in the index, and in the peer group on December 31, 2015 and that all dividends paid by us and such companies were reinvested, and tracks the relative performance of such investments through December 31, 2020. ​ 44 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/15 12/16 12/17 12/18 12/19 12/20 Grand Canyon Education, Inc. 100.00 145.69 223.16 239.63 238.76 232.08 S&P 500 100.00 111.96 136.40 130.42 171.49 203.04 2020 Peer Group 100.00 108.22 137.03 151.00 137.12 174.93 ​ The information contained in the performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC nor shall such information be deemed incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. The stock price performance included in this graph is not necessarily indicative of future stock price performance. Item 6. Selected Consolidated Financial and Other Data The following selected consolidated financial and other data should be read in conjunction with Item 8, Consolidated Financial Statements and Supplementary Data , and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , to fully understand the information presented below. The selected consolidated income statement data and other data, excluding period end enrollment, for the years ended December 31, 2020, 2019 and 2018, and the selected consolidated balance sheet data as of December 31, 2020 and 2019, have been 45 Table of Contents derived from our audited consolidated financial statements for such years, which are included herein. The selected consolidated income statement data and other data, excluding period end enrollment, for the years ended December 31 2017 and 2016, and the selected consolidated balance sheet data as of December 31, 2018, 2017 and 2016, have been derived from our audited consolidated financial statements for such years, which are not included herein. Our historical results are not necessarily indicative of our results for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 2017 2016 ​ ​ (In thousands, except per share data) Income Statement Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ $ 844,096 ​ $ 778,643 ​ $ 333,002 ​ $ — ​ $ — University related revenue ​ — ​ — ​ 512,499 ​ 974,134 ​ 873,344 Net revenue ​ 844,096 ​ 778,643 ​ 845,501 ​ 974,134 ​ 873,344 Costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology and academic services (1) ​ 116,012 ​ 90,512 ​ 43,574 ​ 41,834 ​ 39,101 Counseling services and support (1) ​ 234,534 ​ 223,598 ​ 204,690 ​ 188,595 ​ 175,045 Marketing and communication (1) ​ 164,334 ​ 142,896 ​ 117,420 ​ 109,092 ​ 98,592 General and administrative (1) ​ 43,360 ​ 44,317 ​ 29,968 ​ 27,157 ​ 28,079 Amortization of intangible assets ​ ​ 8,419 ​ ​ 8,223 ​ ​ — ​ ​ — ​ ​ — University related expenses (1) ​ — ​ — ​ 173,330 ​ 324,140 ​ 294,188 Loss on transaction ​ — ​ 3,966 ​ 18,370 ​ 562 ​ 1,136 Total costs and expenses ​ 566,659 ​ 513,512 ​ 587,352 ​ 691,380 ​ 636,141 Operating income ​ 277,437 ​ 265,131 ​ 258,149 ​ 282,754 ​ 237,203 Interest income on Secured Note ​ 59,190 ​ 59,297 ​ 26,947 ​ — ​ — Interest expense ​ (4,402) ​ (11,311) ​ (1,536) ​ (2,169) ​ (1,328) Investment interest and other ​ 915 ​ 4,385 ​ 3,440 ​ 2,943 ​ 249 Income before income taxes ​ 333,140 ​ 317,502 ​ 287,000 ​ 283,528 ​ 236,124 Income tax expense ​ 75,944 ​ 58,327 ​ 57,989 ​ 80,209 ​ 87,610 Net income ​ $ 257,196 ​ $ 259,175 ​ $ 229,011 ​ $ 203,319 ​ $ 148,514 Earnings per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 5.49 ​ $ 5.42 ​ $ 4.81 ​ $ 4.31 ​ $ 3.22 Diluted ​ $ 5.45 ​ $ 5.37 ​ $ 4.73 ​ $ 4.22 ​ $ 3.15 Shares used in computing earnings per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 46,880 ​ 47,814 ​ 47,608 ​ 47,140 ​ 46,083 Diluted ​ 47,165 ​ 48,266 ​ 48,414 ​ 48,235 ​ 47,121 Other Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ $ 29,418 ​ $ 22,391 ​ $ 94,857 ​ $ 123,954 ​ $ 239,019 Depreciation and amortization ​ $ 21,233 ​ $ 18,696 ​ $ 35,673 ​ $ 54,228 ​ $ 45,683 Intangible asset amortization ​ $ 8,419 ​ $ 8,223 ​ $ — ​ $ — ​ $ — Period end enrollment (2) ​ 115,997 ​ 106,861 ​ 97,369 ​ 90,297 ​ 81,908 Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, and investments ​ $ 256,609 ​ $ 143,873 ​ $ 120,346 ​ $ 242,745 ​ $ 108,572 Restricted cash, cash equivalents and investments ​ $ — ​ $ 300 ​ $ 61,667 ​ $ 94,534 ​ $ 84,931 Secured Note receivable, net ​ $ 964,912 ​ $ 969,912 ​ $ 900,093 ​ $ — ​ $ — Total assets (3) ​ $ 1,844,579 ​ $ 1,690,289 ​ $ 1,324,017 ​ $ 1,303,573 ​ $ 1,092,493 Notes payable (including short-term) ​ $ 107,774 ​ $ 140,918 ​ $ 59,905 ​ $ 66,616 ​ $ 98,252 Total stockholders’ equity ​ $ 1,574,329 ​ $ 1,443,433 ​ $ 1,213,597 ​ $ 985,951 ​ $ 773,686 ​ (1) During the third quarter of 2018, GCE made changes in its presentation of operating expenses and reclassified prior periods to conform to the current presentation. All years in the five (5) year table were reclassified to conform to the current presentation. (2) Enrollment represents individual students who attended a course during the last two months of the calendar year. 46 Table of Contents (3) During the first quarter of 2016, GCE made changes in its presentation of deferred tax assets and liabilities to comply with a new accounting standard. Accordingly, we reclassified the current deferred taxes to net against noncurrent deferred tax liabilities for all prior periods to conform to the current presentation.