What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 87 added, 59 removed, 439 unchanged (25% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

20 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, 2023 and December 31, 2022

0 shares issued and outstanding at September 30, 2023 and December 31, 2022

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

53,970 and 53,830 shares issued and 30,398 and 31,058 shares outstanding at June 30, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 23,572 and 22,772 shares of common stock at June 30, 2023 and December 31, 2022, respectively

53,970 and 53,830 shares issued and 30,092 and 31,058 shares outstanding at September 30, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 23,878 and 22,772 shares of common stock at September 30, 2023 and December 31, 2022, respectively

( 1,832,686 )

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 $ 86 and $ 24 for the three months ended June 30, 2023 and 2022, respectively, and $ 49 and $ 123 for the six months ended June 30, 2023 and 2022, respectively

Unrealized gains (losses) on available-for-sale securities, net of taxes of $ 30 and $ 8 for the three months ended September 30, 2023 and 2022, respectively, and $ 19 and $ 131 for the nine months ended September 30, 2023 and 2022, respectively

Comprehensive income

3 unchanged sentences

(In thousands)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Treasury Stock

14 unchanged sentences

( 1,798,619 )

Six Months Ended June 30, 2022

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2023

( 1,832,686 )

GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

Nine Months Ended September 30, 2022

Treasury Stock

13 unchanged sentences

( 1,635,223 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2022

( 1,683,417 )

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)

23 unchanged sentences

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of period

15 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 four 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, 2023, GCE provides education services to 25 university partners across the United States.

As of September 30, 2023, GCE provides education services to 25 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, 2022 from which the December 31, 2022 balance sheet information was derived.

As of June 30, 2023 and December 31, 2022, the Company considered its investments in corporate bonds, agency bonds and commercial paper as available-for-sale securities based on the Company’s intent for the respective securities.

As of September 30, 2023 and December 31, 2022, the Company considered its investments in corporate bonds, agency bonds and commercial paper 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 1 and 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.

26 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, 2023 and December 31, 2022, $ 1,141 and $ 910 , 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, 2023 and December 31, 2022, $ 906 and $ 910 , 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.

Long-Lived Assets

30 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, 2023.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of September 30, 2023.

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.

40 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, 2023.

There have been no amounts written off and no reserves established as of September 30, 2023.

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 $ 5,525 and $ 5,560 as of June 30, 2023 and December 31, 2022, respectively, are included in accounts receivable in our consolidated balance sheets.

Our unbilled revenue of $ 7,778 and $ 5,560 as of September 30, 2023 and December 31, 2022, 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.

37 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 at least one major rating agency at the time of purchase.

All of the Company’s cash equivalents and investments as of June 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022 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, 2023 and December 31, 2022, the Company had $ 142,172 and $ 119,639 , respectively, in excess of the FDIC insured limit.

At September 30, 2023 and December 31, 2022, the Company had $ 56,119 and $ 119,639 , respectively, in excess of the FDIC insured limit.

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

3 unchanged sentences

(In thousands, except per share data)

the three-month periods ended June 30, 2023 and 2022, 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.

the nine-month periods ended September 30, 2023 and 2022, 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

7 unchanged sentences

The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.

As of June 30, 2023 and December 31, 2022, the Company had investments of $ 90,444 and $ 61,295 , respectively, classified as available-for-sale securities.

As of June 30, 2023, the Company had available-for-sale investments comprised of the following:

As of June 30, 2023

As of September 30, 2023 and December 31, 2022, the Company had investments of $ 97,553 and $ 61,295 , respectively, classified as available-for-sale securities.

As of September 30, 2023, the Company had available-for-sale investments comprised of the following:

As of September 30, 2023

Corporate bonds

1 unchanged sentence

Total investments

For the six months ended June 30, 2023 and 2022, the net unrealized losses were $ 157 and $ 398 , respectively, net of taxes.

For the nine months ended September 30, 2023 and 2022, the net unrealized losses were $ 60 and $ 417 , respectively, net of taxes.

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

1 unchanged sentence

If our assessment indicates that an expected credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the expected credit loss in the allowance for credit losses in technology and academic services in our consolidated income statements.

The Company has the ability and intent to hold these investments until recovery.

The Company has the ability and intent to hold these investments until recovery or maturity.

Grand Canyon Education, Inc.

8 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, 2023 and 2022, approximately 107 and 0 , respectively, and for both the six-month periods ended June 30, 2023 and 2022, approximately 103 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.

For the three-month periods ended September 30, 2023 and 2022, approximately 2 and 25 , respectively, and for the nine-month periods ended September 30, 2023 and 2022, approximately 70 and 77 , 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.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Property and Equipment

Property and equipment consist of the following:

September 30,

Land improvements

6 unchanged sentences

Property and equipment, net

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Amortizable Intangible Assets

5 unchanged sentences

Amortizable intangible assets consist of the following as of:

June 30, 2023

September 30, 2023

Average Useful

4 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 three months to 10 years and six 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 $ 6,170 and $ 4,807 for the six-month periods ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the Company had $ 26,805 of non-cancelable operating lease commitments for seven off-campus classroom and laboratory sites and $ 192 for optical fiber communication lines that had not yet commenced.

The Company’s weighted-average remaining lease term relating to its operating leases is 7.93 years, with a weighted-average discount rate of 3.47 % .

As of June 30, 2023, the Company had no financing leases.

These leases have remaining lease terms that range from eight

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

Future payment obligations with respect to the Company’s operating leases, which were existing at June 30, 2023, by year and in the aggregate, are as follows:

months to 10 years and eight 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 $ 3,525 and $ 2,789 for the three-month periods ended September 30, 2023 and 2022, respectively, and $ 9,695 and $ 7,596 for the nine-month periods ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the Company had $ 24,077 of non-cancelable operating lease commitments for four off-campus classroom and laboratory sites and $ 192 for optical fiber communication lines that had not yet commenced.

The Company’s weighted-average remaining lease term relating to its operating leases is 7.99 years, with a weighted-average discount rate of 3.78 % .

As of September 30, 2023, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at September 30, 2023, by year and in the aggregate, are as follows:

Year Ending December 31,

15 unchanged sentences

Bachus as defendants for allegedly making false and materially misleading statements regarding the circumstances surrounding the Company’s sale of Grand Canyon University (the “University”) to a non-profit entity on July 1, 2018 and the subsequent decision of the U.S.

Department of Education to continue to treat the University as a for-profit institution for education regulatory purposes (collectively, the “Conversion”).

Department of Education to continue to treat the University as a for-profit

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

institution for education regulatory purposes (collectively, the “Conversion”).

The complaint asserted a putative class period stemming from January 5, 2018, the date when the Company announced that it had applied to the University’s accreditor for approval of the Conversion, to January 27, 2020, the date prior to the publication of a short-seller report focused on the Conversion.

4 unchanged sentences

Thereafter, the plaintiffs filed a consolidated amended complaint on October 20, 2020 and the Company filed a motion to dismiss on December 21, 2020.

On August 23, 2021, the Court

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

granted the Company’s motion to dismiss in its entirety but permitted plaintiffs to file a further amended complaint to correct deficiencies in the initial complaint.

On August 23, 2021, the Court granted the Company’s motion to dismiss in its entirety but permitted plaintiffs to file a further amended complaint to correct deficiencies in the initial complaint.

The plaintiffs filed further amended complaints on September 28, 2021 and January 21, 2022, and the Company filed a further motion to dismiss on March 15, 2022.

12 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, 2023, 1,081 shares were available for grants under the 2017 Plan.

As of September 30, 2023, 1,081 shares were available for grants under the 2017 Plan.

Restricted Stock

During the six months ended June 30, 2023, the Company granted 136 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

During the nine months ended September 30, 2023, the Company granted 136 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, 2023, the Company withheld 56 shares of common stock in lieu of taxes at a cost of $ 6,331 on the restricted stock vesting dates.

During the nine months ended September 30, 2023, the Company withheld 56 shares of common stock in lieu of taxes at a cost of $ 6,331 on the restricted stock vesting dates.

In June 2023, 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.

The restricted shares granted to these directors have voting rights and vest on the earlier of (a) the one year anniversary of the date of grant or (b) immediately prior to the next annual stockholders meeting.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

A summary of the activity related to restricted stock granted under the Company’s Incentive Plan since December 31, 2022 is as follows:

3 unchanged sentences

Forfeited, canceled or expired

Outstanding as of June 30, 2023

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Outstanding as of September 30, 2023

Share-based Compensation Expense

The table below outlines share-based compensation expense for the six months ended June 30, 2023 and 2022 related to restricted stock granted:

The table below outlines share-based compensation expense for the nine months ended September 30, 2023 and 2022 related to restricted stock granted:

Technology and academic services

6 unchanged sentences

Treasury Stock

Our Board of Directors has authorized, under its existing stock repurchase program, an aggregate authorization for share repurchases since the initiation of our program of $ 1,845,000 .

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

On October 25, 2023, 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 $ 2,045,000 .

The expiration date on the repurchase authorization is March 1, 2025.

Repurchases occur at the Company’s discretion.

1 unchanged sentence

The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant.

During the six months ended June 30, 2023 the Company repurchased 729 shares of common stock, at an aggregate cost of $ 80,224 .

As of June 30, 2023, there remained $ 115,622 available under its current share repurchase authorization.

During the nine months ended September 30, 2023 the Company repurchased 1,035 shares of common stock, at an aggregate cost of $ 113,954 .

As of September 30, 2023, there remained $ 81,892 available under its current share repurchase authorization (which authorization was increased to $ 281,892 in October 2023).

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.

3 unchanged sentences

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

As of and for the three months ended June 30, 2023 and 2022, related party transactions consisted of the following:

As of and for the nine months ended September 30, 2023 and 2022, related party transactions consisted of the following:

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

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

2 unchanged sentences

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

The Company made voluntary charitable contributions of $ 700 and $ 200 for both the three and six months ended June 30, 2023 and 2022, respectively, of which no amounts were owed as of June 30, 2023 and 2022.

The Company made voluntary charitable contributions of $ 700 and $ 200 for each of the nine months ended September 30, 2023 and 2022, respectively, of which no amounts were owed as of September 30, 2023 and 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