What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-08-04 · 73 added, 49 removed, 475 unchanged (20% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

21 unchanged sentences

Consolidated Balance Sheets

September 30,

(In thousands, except par value)

24 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000 shares authorized;

0 shares issued and outstanding at June 30, 2022 and December 31, 2021

0 shares issued and outstanding at September 30, 2022 and December 31, 2021

Common stock, $ 0.01 par value, 100,000 shares authorized;

53,830 and 53,637 shares issued and 31,963 and 37,722 shares outstanding at June 30, 2022 and December 31, 2021, respectively

Treasury stock, at cost, 21,867 and 15,915 shares of common stock at June 30, 2022 and December 31, 2021, respectively

53,830 and 53,637 shares issued and 31,377 and 37,722 shares outstanding at September 30, 2022 and December 31, 2021, respectively

Treasury stock, at cost, 22,453 and 15,915 shares of common stock at September 30, 2022 and December 31, 2021, respectively

( 1,683,417 )

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

Other comprehensive income, net of tax:

Unrealized losses on available-for-sale securities, net of taxes of $ 24 and $ 22 for the three months ended June 30, 2022 and 2021, respectively, and $ 123 and $ 57 for the six months ended June 30, 2022 and 2021, respectively

Unrealized losses on available-for-sale securities, net of taxes of $ 8 and $ 56 for the three months ended September 30, 2022 and 2021, respectively, and $ 131 for the nine months ended September 30, 2022

Comprehensive income

3 unchanged sentences

(In thousands)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Treasury Stock

14 unchanged sentences

( 1,635,223 )

Six Months Ended June 30, 2021

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2022

( 1,683,417 )

GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

Nine Months Ended September 30, 2021

Treasury Stock

12 unchanged sentences

Balance at June 30, 2021

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2021

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

18 unchanged sentences

Funding to GCU

Repayment by GCU

Purchases of investments

3 unchanged sentences

Principal payments on notes payable

Net borrowings from revolving line of credit

Repurchase of common shares and shares withheld in lieu of income taxes

18 unchanged sentences

GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale.

GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation, a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across nine colleges both online, on ground at its campus in Phoenix, Arizona and at three off-campus classroom and laboratory sites.

In January 2019, GCE began providing education services to numerous university partners across the United States, through our wholly owned subsidiary, Orbis Education, which we acquired, by merger on January 22, 2019 (the “Acquisition”).

2 unchanged sentences

In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs.

As of June 30, 2022, GCE provides education services to 27 university partners across the United States.

As of September 30, 2022, GCE provides education services to 27 university partners across the United States.

Summary of Significant Accounting Policies

10 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 from which the December 31, 2021 balance sheet information was derived.

As of June 30, 2022 and 2021, the Company considered its investments in corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations as available-for-sale securities based on the Company’s intent for the respective securities.

As of September 30, 2022 and 2021, the Company considered its investments in corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations as available-for-sale securities based on the Company’s intent for the respective securities.

Available-for-sale securities are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income.

Unrealized losses considered to be other-than-temporary are recognized currently in earnings.

Unrealized losses considered to be other-than-temporary are recognized

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

currently in earnings.

Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income.

22 unchanged sentences

The Company has concluded that the most appropriate method to amortize the deferred content assets is on a straight-line basis over the estimated life of the course, which is generally four years which corresponds with course’s review and major revision cycle.

As of June 30, 2022 and December 31, 2021, $ 1,020 and $ 1,168 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

As of September 30, 2022 and December 31, 2021, $ 1,038 and $ 1,168 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

Grand Canyon Education, Inc.

33 unchanged sentences

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of June 30, 2022.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of September 30, 2022.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets.

44 unchanged sentences

The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the expected credit losses.

There have been no amounts written off and no reserves established as of June 30, 2022.

There have been no amounts written off and no reserves established as of September 30, 2022.

The Company will continue to review and revise its allowance methodology based on its collection experience with its partners.

1 unchanged sentence

Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available.

Our unbilled revenue of $ 7,912 and $ 3,841 as of June 30, 2022 and December 31, 2021, respectively, are included in accounts receivable in our consolidated balance sheets.

Our unbilled revenue of $ 11,973 and $ 3,841 as of September 30, 2022 and December 31, 2021, respectively, are included in accounts receivable in our consolidated balance sheets.

Deferred revenue represents the excess of amounts received as compared to amounts recognized in revenue on our consolidated statements of income as of the end of the reporting period, and such amounts are reflected as a current liability on our consolidated balance sheets.

49 unchanged sentences

The Company believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that requires investments to have a minimum BBB rating, depending on the type of security, by one major rating agency at the time of purchase.

All of the Company’s cash equivalents and investments as of June 30, 2022 and December 31, 2021 consist of investments rated BBB or higher by at least one rating agency.

All of the Company’s cash equivalents and investments as of September 30, 2022 and December 31, 2021 consist of investments rated BBB or higher by at least one rating agency.

Additionally, the Company utilizes at least one financial institution to conduct initial and ongoing credit analysis on its investment portfolio to monitor and lower the potential impact of market risk associated with its cash equivalents and investment portfolio.

1 unchanged sentence

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

At June 30, 2022 and December 31, 2021, the Company had $ 138,519 and $ 600,130 , respectively, in excess of the FDIC insured limit.

At September 30, 2022 and December 31, 2021, the Company had $ 38,851 and $ 600,130 , respectively, in excess of the FDIC insured limit.

The Company is also subject to credit risk for its accounts receivable balance.

Our dependence on our most significant university partner, with 85.1 % and 85.7 % of total service revenue for the six-month periods ended June 30, 2022 and 2021, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue for the Company.

Our dependence on our most significant university partner, with 84.8 % and 85.0 % of total service revenue for the nine-month periods ended September 30, 2022 and 2021, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue for the Company.

Use of Estimates

10 unchanged sentences

(In thousands, except per share data)

As of June 30, 2022, the Company had investments of $ 63,867 , classified as available-for-sale securities.

As of September 30, 2022, the Company had investments of $ 68,403 , classified as available-for-sale securities.

As of December 31, 2021, the Company had no investments.

As of June 30, 2022, the Company had available-for-sale investments comprised of the following:

As of June 30, 2022

As of September 30, 2022, the Company had available-for-sale investments comprised of the following:

As of September 30, 2022

Corporate bonds

1 unchanged sentence

Total investments

For the six months ended June 30, 2022, the net unrealized losses were $ 398 , net of taxes.

For the nine months ended September 30, 2022, the net unrealized losses were $ 417 , net of taxes.

Available-for-sale debt securities are carried at fair value on the consolidated balance sheets.

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Basic weighted average shares outstanding

2 unchanged sentences

Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock in accordance with the treasury stock method.

For the three-month periods ended June 30, 2022 and 2021, approximately nil and 1 , respectively, and for the six-month periods ended June 30, 2022 and 2021, approximately 103 and 2 ,

For the three-month periods ended September 30, 2022 and 2021, approximately 25 and 73 , respectively, and for the nine-month periods ended September 30, 2022 and 2021,

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

approximately 77 and 25 , respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

These restricted stock awards could be dilutive in the future.

2 unchanged sentences

Allowance for credit losses

Six months ended June 30, 2022

Six months ended June 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

(1) Amount represents the cumulative effect of the adoption of ASU No.

3 unchanged sentences

Property and equipment consist of the following:

September 30,

Land improvements

8 unchanged sentences

Amortizable intangible assets consist of the following as of:

June 30, 2022

September 30, 2022

Average Useful

8 unchanged sentences

The Company has operating leases for off-campus classroom and laboratory sites, office space, office equipment, and optical fiber communication lines.

These leases have remaining lease terms that range from two months to 10 years and three months.

These leases have remaining lease terms that range from one month to 10 years and 9 months.

At lease inception, we determine the lease term by assuming no exercises of renewal options, due to the Company’s constantly changing geographical needs for its university partners.

Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company had operating lease costs of $ 4,807 and $ 4,862 for the six-month periods ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, the Company had $ 28,619 of non-cancelable operating lease commitments for five off-campus classroom and laboratory sites and an office equipment lease that had not yet commenced.

The Company had operating lease costs of $ 7,596 and $ 7,371 for the nine-month periods ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, the Company had $ 9,569 of non-cancelable operating lease commitments for one off-campus classroom and laboratory sites that had not yet commenced.

The Company’s weighted-average remaining lease term relating to its operating leases is 8.22 years, with a weighted-average discount rate of 3.35 % .

As of June 30, 2022, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at June 30, 2022, by year and in the aggregate, are as follows:

As of September 30, 2022, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at September 30, 2022, by year and in the aggregate, are as follows:

Year Ending December 31,

20 unchanged sentences

The Company makes equity incentive grants pursuant to our 2017 Equity Incentive Plan (the “2017 Plan”) under which a maximum of 3,000 shares may be granted.

As of June 30, 2022, 1,221 shares were available for grants under the 2017 Plan.

As of September 30, 2022, 1,221 shares were available for grants under the 2017 Plan.

Restricted Stock

During the six months ended June 30, 2022, the Company granted 189 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

During the nine months ended September 30, 2022, the Company granted 189 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

The restricted shares have voting rights and vest in five annual installments of 20 %, with the first installment vesting in March of the calendar year following the date of grant (the “first vesting date”) and subsequent installments vesting on each of the four anniversaries of the first vesting date.

Upon vesting, shares will be withheld in lieu of taxes equivalent to the minimum statutory tax withholding required to be paid when the restricted stock vests.

During the six months ended June 30, 2022, the Company withheld 52 shares of common stock in lieu of taxes at a cost of $ 4,625 on the restricted stock vesting dates.

During the nine months ended September 30, 2022, the Company withheld 52 shares of common stock in lieu of taxes at a cost of $ 4,625 on the restricted stock vesting dates.

In June 2022, following the annual stockholders meeting, the Company granted 4 shares of common stock to the non-employee members of the Company’s Board of Directors.

5 unchanged sentences

Forfeited, canceled or expired

Outstanding as of June 30, 2022

Outstanding as of September 30, 2022

Grand Canyon Education, Inc.

2 unchanged sentences

Stock Options

During the six months ended June 30, 2022, no options were granted.

During the nine months ended September 30, 2022, no options were granted.

As of December 31, 2021, all options have been exercised or expired.

Share-based Compensation Expense

The table below outlines share-based compensation expense for the six months ended June 30, 2022 and 2021 related to restricted stock granted:

The table below outlines share-based compensation expense for the nine months ended September 30, 2022 and 2021 related to restricted stock granted:

Technology and academic services

6 unchanged sentences

Treasury Stock

The Board of Directors has authorized under its existing stock repurchase program, an aggregate authorization for share repurchases since the initiation of our program of $ 1,645,000 .

On October 26, 2022, the Board of Directors increased the authorization under its existing stock repurchase program by $ 200,000 reflecting an aggregate authorization for share repurchases since the initiation of our program of $ 1,845,000 .

The expiration date on the repurchase authorization is December 31, 2023.

12 unchanged sentences

Under the ASR agreement, the Company received initial delivery on May 17, 2021 of approximately 418 shares of common stock, representing approximately 80 % of the number of shares of common stock initially underlying the ASR agreement based on the closing price of the common stock of $ 95.63 , on May 14, 2021.

At inception of the ASR agreement, the Company recognized the initial delivery of shares as treasury stock of $ 40,000 , and recognized the remaining amount

At inception of the ASR agreement, the

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

underlying the ASR agreement as a reduction to additional paid in capital of $ 10,000 .

Company recognized the initial delivery of shares as treasury stock of $ 40,000 , and recognized the remaining amount underlying the ASR agreement as a reduction to additional paid in capital of $ 10,000 .

The total number of shares that the Company repurchased under the ASR program was based on the volume-weighted average price of the common stock during the term of the ASR agreement, less a discount, and subject to potential adjustments pursuant to the terms and conditions of the ASR agreement.

2 unchanged sentences

The ASR agreement resulted in a total of 558 shares repurchased at an average cost of $ 89.68 .

During the six months ended June 30, 2022 the Company repurchased 5,894 shares of common stock, at an aggregate cost of $ 523,387 .

As of June 30, 2022, there remained $ 72,046 available under its current share repurchase authorization.

During the nine months ended September 30, 2022 the Company repurchased 6,476 shares of common stock, at an aggregate cost of $ 571,581 .

As of September 30, 2022, there remained $ 23,852 available under its current share repurchase authorization (which authorization was increased to $ 223,852 in October 2022).

Shares repurchased in lieu of taxes are not included in the repurchase plan totals as they were approved in conjunction with the restricted share awards.

2 unchanged sentences

The following transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

As of and for the six months ended June 30, 2022 and 2021, related party transactions consisted of the following:

As of and for the nine months ended September 30, 2022 and 2021, related party transactions consisted of the following:

GCE Community Fund (“GCECF”) – GCECF was initially formed in 2014.

3 unchanged sentences

The Company is not the primary beneficiary of GCECF, and accordingly, the Company does not consolidate GCECF’s statement of activities with its financial results.

The Company contributed $ 200 for the six months ended June 30, 2022, of which no amounts were owed as of June 30, 2022.

The Company contributed $ 200 for the nine months ended September 30, 2022, of which no amounts were owed as of September 30, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements