Second graph, fourth sentence of release should read: Non-GAAP adjusted diluted EPS was $0.04 (sted Non-GAAP adjusted diluted EPS was $0.05).

The corrected release reads:

HIGHER ONE HOLDINGS, INC. REPORTS SECOND QUARTER 2013 FINANCIAL RESULTS
  • Revenue was $40.0 million, up 2% year-over-year
  • Total Signed School Enrollment (SSE) increased to approximately 13 million students at quarter end
  • OneDisburse new sales over 100,000 SSE

Higher One Holdings, Inc. (NYSE: ONE) (“Higher One” or the “Company”), a leader in providing financial services and data analytics to over 1,600 college and university campuses across the U.S., today announced financial results for the second quarter of 2013.

Higher One reported revenue of $40.0 million, as compared to $38.9 million in the second quarter of 2012. The Company reported GAAP net income of $3.6 million for second quarter 2013, and non-GAAP adjusted net income, which excludes certain non-recurring or non-cash items, of $2.2 million. GAAP diluted EPS was $0.07 in the quarter, as compared to $0.07 in the second quarter of 2012. Non-GAAP adjusted diluted EPS was $0.04, as compared to $0.09 for the same period a year ago. In the second quarter of 2013, non-GAAP adjusted EBITDA was $5.9 million.

Mark Volchek, Chief Executive Officer, said, “The second quarter is a seasonally slower period for company revenue. While organic revenue was lower on a year over year basis, we were able to grow overall revenue as a result of the additions of the Campus Labs suite of data analytics software, and the Campus Solutions business, which we acquired from Sallie Mae during the second quarter. We have successfully completed the integration of our sales teams and are pleased with the overall feedback we are receiving from schools about the acquisition.”

Volchek continued, “We have made changes to the fee schedule for the OneAccount over the past year. These changes make the account even more consumer-friendly than it already was, as we continue to compare favorably to the other student checking and prepaid card options for students. The issues of how the fee changes will roll out, the changes in the rate of adoption of the OneAccount, the variations in financial aid volumes and the unpredictability of enrollment trends make it challenging to provide accurate guidance at this time. As such, we are suspending providing revenue and earnings guidance.”

Total enrollment at higher education clients that have purchased the OneDisburse® service increased to 4.8 million, an increase of approximately 300,000 from 4.5 million at the end of the second quarter of 2012. Total enrollment at higher education clients that have signed up for at least one of our OneDisburse, CASHNet, Campus Labs or Campus Solutions modules totals approximately 13 million.

The number of OneAccounts at the end of the second quarter of 2013 was approximately 2.2 million, up 14% from the second quarter of 2012. The number of OneAccounts was essentially flat on a sequential basis.

Conference Call Information

Higher One will host a conference call at 8:30 a.m. ET today to discuss second quarter results. The dial in phone number is 866-318-8613 for domestic listeners and 617-399-5132 for international listeners. The conference ID # is 25495047. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures can be accessed through Higher One’s investor relations website at http://www.ir.higherone.com. In addition, an archive of the webcast will be available for 90 days through the same link.

About Higher One Holdings

Higher One Holdings, Inc. (NYSE: ONE) partners with colleges and universities to lower their administrative costs and to improve graduation rates. We provide a broad array of payment, refund disbursement and data analytics and management tools to institutions that help them save money and enhance institutional effectiveness. And for students, we offer financial literacy programs and convenient, flexible and affordable transaction options to help them manage their finances. Higher One is a leader in higher education, supporting more than 1,600 schools and 13 million enrolled students. More information about Higher One can be found at www.ir.higherone.com.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Management’s projections and expectations are subject to a number of risks and uncertainties that could cause actual performance to differ materially from that predicted or implied. Forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words intended to identify information that is not historical in nature. Forward-looking statements contained herein include, among others, statements about the expected benefits of the acquisition of Sallie Mae’s Campus Solutions business by Higher One and such statements are based on the current beliefs and expectations of Higher One and Sallie Mae's management, as applicable, and are subject to known and unknown risks and uncertainties. There are a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements, including, but not limited to Higher One being unable to achieve expected synergies and operating efficiencies in the acquisition within the expected time-frames or at all and to successfully integrate Sallie Mae’s Campus Solutions business operations into those of Higher One; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; the retention of certain key employees in the Campus Solutions business at Sallie Mae; the outcome of any legal proceedings that may be instituted against the parties and others related to the acquisition agreement and the amount of the costs, fees, expenses and charges related to the acquisition. These statements speak only as of the date they are made, and the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. The forward-looking statements in this press release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof. Information about the risks and factors that could affect future performance can be found in our recent SEC filings.

Use of Non-GAAP Financial Measures

This release includes certain metrics presented on a non-GAAP basis, including non-GAAP adjusted EBITDA, non-GAAP adjusted net income, and non-GAAP adjusted EPS. We believe that these non-GAAP measures, which exclude amortization of intangibles, stock-based compensation, and certain non-recurring or non-cash impacts to our results, all net of taxes, provide useful information regarding normalized trends relating to the company’s financial condition and results of operations. Reconciliations of these non-GAAP measures to their closest comparable GAAP measure are included in this press release.
 
Higher One Holdings, Inc.
Consolidated Income Statement
(In thousands of dollars, except share and per share amounts)
                       
 
Three Months Six Months
Ended June 30, Ended June 30,
2013 2012 2013 2012
Revenue:
Account revenue $ 25,944 $ 30,033 $ 69,307 $ 77,143
Payment transaction revenue 6,086 4,172 12,787 9,501
Higher education institution revenue 7,725 4,027 14,866 8,651
Other revenue   268   681   443   1,399
Revenue 40,023 38,913 97,403 96,694
Cost of revenue   17,894   17,141   40,194   38,465
Gross margin   22,129   21,772   57,209   58,229
Operating expenses:
General and administrative

13,576
11,077 26,665 22,303
Product development

2,444
1,085 4,339 1,991
Sales and marketing 4,632 2,946 7,839 5,813
Merger and acquisition related   (5,011)   -   (4,465)   -
Total operating expenses   15,641   15,108   34,378   30,107
Income from operations 6,488 6,664 22,831 28,122
Interest income 20 32 39 64
Interest expense (766) (108) (1,395) (217)
Other income   78   78   155   155
Net income before income taxes 5,820 6,666 21,630 28,124
Income tax expense   2,261   2,614   8,269   10,684
Net income $ 3,559 $ 4,052 $ 13,361 $ 17,440
 
Net income available to common stockholders:
Basic $ 3,559 $ 4,052 $ 13,361 $ 17,440
Diluted $ 3,559 $ 4,052 $ 13,361 $ 17,440
 
Weighted average shares outstanding
Basic 46,704,451 54,653,888 46,489,470 55,350,851
Diluted 48,382,828 57,717,127 48,354,283 58,588,952
 
Net income available to common stockholders per common share:
Basic $ 0.08 $ 0.07 $ 0.29 $ 0.32
Diluted $ 0.07 $ 0.07 $ 0.28 $ 0.30
 
 
Higher One Holdings, Inc.
Consolidated Balance Sheet
(In thousands of dollars, except share and per share amounts)
                       
June 30, December 31,
2013 2012
Assets
Current assets:
Cash and cash equivalents $ 6,823 $ 13,031
Investments in marketable securities 247 247
Accounts receivable 11,317 4,860
Income receivable 13,523 7,466
Deferred tax assets 5 37
Prepaid expenses and other current assets 9,104 10,890
Restricted cash   -   2,000
Total current assets   41,019   38,531
Deferred costs 4,224 4,665
Fixed assets, net 52,905 52,686
Intangible assets, net 59,859 38,143
Goodwill 66,548 47,000
Loan receivable related to New Markets Tax Credit financing 7,633 7,633
Other assets 1,059 740
Restricted cash   1,500   1,500
Total assets $ 234,747 $ 190,898
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,596 $ 3,756
Accrued expenses 13,391 12,526
Contingent consideration, current portion 535 2,230
Deferred tax liabilities - 356
Deferred revenue   21,129   16,027
Total current liabilities 37,651 34,895
Deferred revenue and other non-current liabilities 2,404 2,517

Loan payable and deferred contribution related to New Markets Tax Credit

financing
9,336 9,490
Debt 112,000 80,000
Contingent consideration, non-current portion - 3,520
Deferred tax liabilities   4,078   2,764
Total liabilities   165,469   133,186
Commitments and contingencies
 
Stockholders' equity:

Common stock, $.001 par value; 200,000,000 shares authorized; 58,842,813

shares issued and 46,929,787 shares outstanding at June 30, 2013; 58,045,404

shares issued and 46,660,781 shares outstanding at December 31, 2012
60 59
Additional paid-in capital 178,418 174,218

Treasury stock, 11,913,026 and 11,384,623 shares at June 30, 2013 and

December 31, 2012, respectively
(137,899) (131,903)
Retained earnings   28,699   15,338
Total stockholders' equity   69,278   57,712
Total liabilities and stockholders' equity $ 234,747 $ 190,898
 
 
Higher One Holdings, Inc.
Consolidated Cash Flow Statement
(In thousands of dollars, except share and per share amounts)
               
Six months ended
June 30,
2013 2012
Cash flows from operating activities
Net income $ 13,361 $ 17,440
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 6,598 4,531
Amortization of deferred finance costs 223 68
Non-cash fair value adjustment of contingent consideration (5,215) -
Stock-based compensation 2,326 2,325
Deferred income taxes 990 (579)
Income tax benefit related to exercise of stock options (735) 1,744
Other income (154) (155)
Loss on disposal of fixed assets 16 26
Changes in operating assets and liabilities:
Accounts receivable (5,687) (3,228)
Income receivable (6,057) (2,124)
Deferred costs (477) (506)
Prepaid expenses and other current assets 5,086 6,273
Other assets (330) (114)
Accounts payable (1,160) 381
Accrued expenses 1,731 (2,742)
Deferred revenue   4,989   3,034
Net cash provided by operating activities   15,505   26,374
Cash flows from investing activities
Purchases of available for sale investment securities - (11,230)
Proceeds from sales and maturities of available for sale investment securities - 15,827

Purchases of fixed assets, net of changes in payables of ($153) and ($10,169),

respectively
(3,296) (20,524)
Acquisition of Campus Solutions (47,250) -
Additions to internal use software (966) (1,369)
Amounts received from restricted cash 2,000 -
Deposits to restricted cash - (2,885)
Proceeds from development related subsidies   -   330
Net cash used in investing activities   (49,512)   (19,851)
Cash flows from financing activities
Proceeds from line of credit 52,000 -
Repayments of line of credit (20,000) -
Tax benefit related to exercise of stock options 735 1,744
Proceeds from exercise of stock options 1,060 902
Purchases of common stock   (5,996)   (22,805)
Net cash provided by (used in) financing activities   27,799   (20,159)
Net change in cash and cash equivalents (6,208) (13,636)
Cash and cash equivalents at beginning of period   13,031   39,085
Cash and cash equivalents at end of period $ 6,823 $ 25,449
 
 

Higher One Holdings, Inc.

Unaudited Supplemental Operating Data

(in thousands)
      Three Months Ended
June 30,       Sept. 30,       Dec. 31,       March 31,       June 30,
2012 2012 2012 2013 2013
 
OneDisburse SSE (1) 4,480 4,589 4,642 4,709 4,798
y/y growth 22% 16% 11% 9% 7%
 
Ending OneAccounts (2) 1,896 2,083 2,004 2,161 2,165
y/y growth 10% 3% 0% 2% 14%
 
(1)   OneDisburse SSE is defined as the number of students enrolled at institutions that have signed contracts to use the OneDisburse service by the end of a given period as of the date the contract is signed (using the most up-to-date IPEDS data at that point in time)
(2) Ending OneAccounts is defined as the number of accounts with a non-zero balance at the end of a given period
 
 
Higher One Holdings, Inc.
Unaudited Reconciliation of Non GAAP Net Income to Non GAAP Adjusted EBITDA
(in thousands)
                         
 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
(unaudited) (unaudited)
(in thousands) (in thousands)
 
Net income $ 3,559 $ 4,052 $ 13,361 $ 17,440
Interest income (20) (32) (39) (64)
Interest expense 766 108 1,395 217
Income tax expense 2,261 2,614 8,269 10,684
Depreciation and amortization   3,487   2,318   6,598   4,531
EBITDA 10,053 9,060 29,584 32,808
Merger and acquisition related expenses (5,011) - (4,465) -
Stock-based compensation expense   841   915   2,326   2,325
Adjusted EBITDA $ 5,883 $ 9,975 $ 27,445 $ 35,133
 
 
Higher One Holdings, Inc.
Unaudited Reconciliation of Non GAAP Net Income and Diluted EPS to Non GAAP Adjusted Net Income and
Adjusted Diluted EPS
(in thousands)
                             
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
(unaudited) (unaudited)
(in thousands) (in thousands)
 
Net income $ 3,559 $ 4,052 $ 13,361 $ 17,440
 
Merger and acquisition related expense (5,011) - (4,465) -
Stock-based compensation expense - incentive stock option grants 500 496 985 1,003
Stock-based compensation expense - non-qualified stock option grants 341 419 1,341 1,322
Amortization of intangibles 1,491 755 2,621 1,523
Amortization of deferred finance costs   112   34   223   68
Total pre-tax adjustments (2,567) 1,704 705 3,916
Tax rate 38.5 % 38.2 % 38.5 % 38.2 %
Tax adjustment   (1,181)   462   (108)   1,113
Adjusted net income $ 2,173 $ 5,294 $ 14,174 $ 20,243
 
Diluted weighted average shares outstanding 48,382,828 57,717,127 48,354,283 58,588,952
Net income per diluted weighted average shares outstanding $ 0.07 $ 0.07 $ 0.28 $ 0.30
Adjusted net income per diluted weighted average shares outstanding $ 0.04 $ 0.09 $ 0.29 $ 0.35
 

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