UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2021


☐	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: 001-34211

GRAND CANYON EDUCATION, INC.

(Exact name of registrant as specified in its charter)


Delaware		20-3356009
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

2600 W. Camelback Road

Phoenix, Arizona 85017

(Address, including zip code, of principal executive offices)

(602) 247-4400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LOPE	Nasdaq Global Select Market

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. Yes ☒ No ◻

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). Yes ☒ No ◻

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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large Accelerated Filer ☒		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 ☐ No ☒

The total number of shares of common stock outstanding as of May 3, 2021, was 46,344,811.

Table of Contents

GRAND CANYON EDUCATION, INC.

FORM 10-Q

INDEX


	Page
PART I – FINANCIAL INFORMATION	3

Item 1 Financial Statements	3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 Quantitative and Qualitative Disclosures About Market Risk	31
Item 4 Controls and Procedures	31

PART II – OTHER INFORMATION	32

Item 1 Legal Proceedings	32
Item 1A Risk Factors	32
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3 Defaults Upon Senior Securities	33
Item 4 Mine Safety Disclosures	33
Item 5 Other Information	33
Item 6 Exhibits	33
SIGNATURES	35

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

GRAND CANYON EDUCATION, INC.

Consolidated Income Statements

(Unaudited)


	Three Months Ended
	March 31,
(In thousands, except per share data)	2021		2020
Service revenue	$	236,934	$	221,655
Costs and expenses:
Technology and academic services		32,051		26,277
Counseling services and support		61,239		60,219
Marketing and communication		47,731		42,693
General and administrative		9,582		9,565
Amortization of intangible assets		2,105		2,105
Total costs and expenses		152,708		140,859
Operating income		84,226		80,796
Interest income on Secured Note		14,549		14,710
Interest expense		(799)		(1,546)
Investment interest and other		121		216
Income before income taxes		98,097		94,176
Income tax expense		19,985		22,791
Net income	$	78,112	$	71,385
Earnings per share:
Basic income per share	$	1.70	$	1.50
Diluted income per share	$	1.69	$	1.49
Basic weighted average shares outstanding		46,084		47,455
Diluted weighted average shares outstanding		46,300		47,764

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

Table of Contents

GRAND CANYON EDUCATION, INC.

Consolidated Balance Sheets


	March 31,		December 31,
(In thousands, except par value)	2021		2020
	(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents	$	225,829	$	245,769
Investments		36,443		10,840
Accounts receivable, net		91,790		62,189
Interest receivable on Secured Note		5,011		5,011
Income tax receivable		763		1,294
Other current assets		14,484		8,639
Total current assets		374,320		333,742
Property and equipment, net		131,929		128,657
Right-of-use assets		59,434		61,020
Secured Note receivable, net		964,912		964,912
Amortizable intangible assets, net		191,533		193,638
Goodwill		160,766		160,766
Other assets		2,133		1,844
Total assets	$	1,885,027	$	1,844,579
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities
Accounts payable	$	17,224	$	16,583
Accrued compensation and benefits		37,307		34,248
Accrued liabilities		29,495		21,945
Income taxes payable		21,180		5,405
Deferred revenue		6,936		—
Current portion of lease liability		7,525		7,393
Current portion of notes payable		33,144		33,144
Total current liabilities		152,811		118,718
Deferred income taxes, noncurrent		22,029		20,288
Other long term liability		107		3
Lease liability, less current portion		55,058		56,611
Notes payable, less current portion		66,344		74,630
Total liabilities		296,349		270,250
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020		—		—

SEC Form 10-Q filed by Grand Canyon Education, Inc.