SEC Comment Letter for Stride, Inc. (LRN) (CIK 0001157408) (LRN) — Jul 17, 2014
Stride, Inc. (LRN) (CIK 0001157408)
Date: July 17, 2014 · CIK: 0001157408 · Accession: 0000000000-14-036178
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-33883
Letter
July 17 , 2014 Via E -mail Mr. Nathani el Davis Chief Executive Officer K12, Inc. 2300 Corporate Park Drive Herndon, VA 20171
Re: K12, Inc. Form 10-K for the Year Ended June 30, 2013 Filed August 29 , 2013 Form 10 -Q for the Quarter Ended March 31, 2014 Filed April 29, 2014 Response dated June 18, 2014 File No. 001-33883
Dear Mr. Davis :
We have reviewed your response letter and have the following comments. In some of our comment, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by providing the requested information or by advising us when you will provide the requested response. If you d o not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing the information you provide in response to th ese comment s, we may have additional comments.
Form 10 -K for the Year Ended June 30, 2 013
Critical Accounting Policies and Estimates, page 63 Revenue Recognition, page 64
1. We note your response to comment 1. Please expand your revenue recognition policy to disclose why you only recognize revenue received by the school, from its state fun ding school district, only up to the expenses incurred. As currently described, it is not clear why you only recognize revenue received by the school, from its state funding school district, only up to the expenses incurred. That statement could be interp reted as referring to the company’s instructional expenses incurred, rather than an individual school’s expenses.
Mr. Nathani el Davis K12, Inc. July 1 7, 2014 Page 2
Form 10 -Q for the Quarter Ended March 31, 2014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations , page 20
Enrollment Data, page 22
2. We note your response to comment 2. As disclosed in your Forms 10 -Q for the 2014 fiscal year, the Average Student Enrollments for Managed Public Schools were 128,550, 125,053 and 124,964 for the three -month periods ended September 30, 2013, December, 31, 2013 and March 31, 2014, respectively. The in -school year enrollment decline for consecutive quarters during 2014 appears to mirr or a similar trend during th e 2013 school year. In this regard, tell us in detail the reasons for the consecutive quarterly decline in average student enrollment s during the 2014 and 2013 school year s. Specifically, tell us whether the consecutive quarte rly decline s were related to an increase in, or sustained high withdrawal rates which were not offset by an increase in new students.
You may contact Kathryn Jacobson , Senior Staff Accountant at (202) 551 -3365 or Robert S. Littlepage , Accounting Branch Chief at (202) 55 1-3361 if you have questions regarding comments on the financial statements and related matters. Please contact Emily Drazan, Staff Attorney at (202) 551 -3208, Kathleen Krebs, Special Counsel at (202) 551 -3350 or me at (202) 551-3810 with any other questions.
Sincerely,
/s/ Robert S. Littlepage, for
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July 17 , 2014 Via E -mail Mr. Nathani el Davis Chief Executive Officer K12, Inc. 2300 Corporate Park Drive Herndon, VA 20171 Re: K12, Inc. Form 10-K for the Year Ended June 30, 2013 Filed August 29 , 2013 Form 10 -Q for the Quarter Ended March 31, 2014 Filed April 29, 2014 Response dated June 18, 2014 File No. 001-33883 Dear Mr. Davis : We have reviewed your response letter and have the following comments. In some of our comment, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by providing the requested information or by advising us when you will provide the requested response. If you d o not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing the information you provide in response to th ese comment s, we may have additional comments. Form 10 -K for the Year Ended June 30, 2 013 Critical Accounting Policies and Estimates, page 63 Revenue Recognition, page 64 1. We note your response to comment 1. Please expand your revenue recognition policy to disclose why you only recognize revenue received by the school, from its state fun ding school district, only up to the expenses incurred. As currently described, it is not clear why you only recognize revenue received by the school, from its state funding school district, only up to the expenses incurred. That statement could be interp reted as referring to the company’s instructional expenses incurred, rather than an individual school’s expenses. Mr. Nathani el Davis K12, Inc. July 1 7, 2014 Page 2 Form 10 -Q for the Quarter Ended March 31, 2014 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations , page 20 Enrollment Data, page 22 2. We note your response to comment 2. As disclosed in your Forms 10 -Q for the 2014 fiscal year, the Average Student Enrollments for Managed Public Schools were 128,550, 125,053 and 124,964 for the three -month periods ended September 30, 2013, December, 31, 2013 and March 31, 2014, respectively. The in -school year enrollment decline for consecutive quarters during 2014 appears to mirr or a similar trend during th e 2013 school year. In this regard, tell us in detail the reasons for the consecutive quarterly decline in average student enrollment s during the 2014 and 2013 school year s. Specifically, tell us whether the consecutive quarte rly decline s were related to an increase in, or sustained high withdrawal rates which were not offset by an increase in new students. You may contact Kathryn Jacobson , Senior Staff Accountant at (202) 551 -3365 or Robert S. Littlepage , Accounting Branch Chief at (202) 55 1-3361 if you have questions regarding comments on the financial statements and related matters. Please contact Emily Drazan, Staff Attorney at (202) 551 -3208, Kathleen Krebs, Special Counsel at (202) 551 -3350 or me at (202) 551-3810 with any other questions. Sincerely, /s/ Robert S. Littlepage, for Larry Spirgel Assistant Director