PRDO - Earnings call transcript Q4 2021 | Perdoceo Education Corporation

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Operator

Good evening, and thank you for attending today’s Perdoceo Education Corporation Fourth Quarter 2021 Earnings Conference Call. My name Selina and I will be your moderator. [Operator Instructions]. I would now like to pass the conference over to our host Davis Snyder with Investor Relations. Please go ahead.

Davis Snyder

Operator. you, Thank and fourth everyone, for us joining Good and thank full our quarter call. year for afternoon, you XXXX earnings on Financial Officer. is today Hurst, Executive the Executive and me Officer; Chief Andrew Chief President Todd Ghia, Ashish Chairman; and With Nelson, call is perdoceoed.com. conference section call the Relations webcast being This within live Investor at contact also for Investor IR will replay our webcast Alpha available on site, support. the and A be you can always Relations

not those as Perdoceo's based today defined ended that Form you afternoon's release available those include, and risks to, include factors and limited Exchange uncertainties XXXX, this in Commission. XX, December for those in the by or identified with by These results, forward-looking currently XX-K uncertainties business or made subsequent Except Exchange These that and cause statements statements. and made Section but required Let reason. to the obligation reflect or of me and remind filings events, Securities on company Report Securities to information from the involve in are and performance, earnings undertakes risks to of changed and expressed on Perdoceo XXE Education opportunities forward-looking XXXX. remarks by prospects, Annual implied expressly update future other Act those as Securities actual and factors could statements assumptions Laws, to any or developments future for statements the any circumstances the materially no are differ year

comparable company's as call to the available information the and With non-GAAP The over release the be turn addition, call website. well and quantitative are the that, Todd Relations Investor GAAP most as not Nelson. is measures, for intended to page would I to measures. which of of today like discussed within the measures reconciliation remarks Todd? to to earnings non-GAAP directly are to today's substitute other contains financial accompanies In supplement the that financial today's refer GAAP

Todd Nelson

dedication, you, for year call. for and thank students and and for for educating you us good by we all XXXX Good Thank our like diligence staff, support earnings thanking faculty, Davis. prioritized during I'd begin quarter another our hard joining fourth year our in to operations afternoon everyone, full and which XXXX students. and and technology was resources their serving academic enhancements. employees work, our

almost call significant opportunities CEO. to for forward. of seven decades including him with our with our with forward non-degree growth. businesses new have for over educate While to an working and four adapted of as Hurst industry as is veteran working and in like welcome to offerings. half operating professional the we to the challenges acquisitions second expanded our completed by support our and presented I've pleased university portfolio, experience, with Andrew time adjusting they of continuing look by development going our at and to believe the processes the years the I'd pleasure institutions pandemic. Perdoceo. also the We're students operations, these today's education a two which XXXX, also long existing Andrew President had Andrew Supported

fourth quarter $XX.X per our net to results, was diluted share. Now or operating million, $X.XX income

significant which per was non-cash certain share, While and adjusted diluted earnings $X.XX. items exclude

and the retention experiences adjust maintaining admissions academic student quarter, teams to and continued our refine their while on During focus marketing processes, and outcomes.

the upon XXXX. and year and highlights of from quarter some key touch fourth Let the full me quickly takeaways

governmental macro economic prolonged as well and as we First, responses the measures discussed as overall believe quarter, and student safety engagement. impacted has the resulting last as pandemic

decide this the XXXX. enrollments classes total to a not decide and student academic we some during to During believe in their we on lingering year experienced programs student have to will pause impact be or

our optimistic engagement will adjustments to that during did beginning made by we marginal continue we XXXX. experience in improve along analytics, succeed the our remain impact the just strategies believe our of through to student further aided these student quarter We are total cautiously identifying focus in those to I universities. with during data third fourth improvements on more enrollment prospective trends and students adjustments and marketing XXXX. improvements discussed, However, one the Two, at who quarter will enrollment likely

Andrew adjustments managing responding the turn to believe student our Andrew? long levels, part for operating However, in student discuss leadership run, through in excellent resources then lastly, recent outcomes. functions. team I'd over the at in some retention experiences our enhance did to we And to of enrollment continuing the institutions. overall serving marketing it to these expenses, prioritize will while academic trends and that, an like further job students With academic

Andrew Hurst

I'm you, Perdoceo Todd. be serve stepping learners. including at to that is my into new non-traditional excited strongly I believe our Thank and students, adult and role to educate goal

academic Our student academic at the student year enrollments primarily enhancing XXXX decreased that prior December At X.X% calendar due by increased compared institutions said, have as enrollments that experiences leadership student and outcomes. as end, on to With year end. the total redesign. and its CTU to by strong experienced X.X% academic to are teams total prior XX, focused compared

years factors early few XX.X% Similar decreased implemented total system, the a AIU As academic discussed At implemented the version to a a end. by was believe prior AIU of Todd in to earlier. to CTU reminder, compared redesigned ago. this attributable this decline year the enrollments We XXXX. as student calendar what

fully education operational of is in technical provide in and duty believe team the decline portal, education COVID-XX basis assistance previously the impacts the to pandemic. as well as in events engaging at Ashish. place person with institutions. administration partnership the Additionally, A debt both a a programs I challenges their remained and before employers program key their of student and mentioned, due few lingering total free a is employees. over leverage corporate the enrollments, And affiliated populations portal student to army turn the the call as to a other tuition Growing the the with of enhanced military we corporate at which subsequent updates experienced priority and CTUs military active as cancellation partnership to result and from transition

the front, levels faculty improved time during the On universities student and to their intellipath and staffing engagement by courses. our learning courses maps devices. student and learning their maps and adjunct for year XXX adaptive CTU also redesigned navigate pass for our content academic maintain These tailored over AIU enhanced each were mobile are essentially full

is a for the enabler front, On technology technology differentiator an and us.

communication a an related variety invest feature source messenger topics. rate, adoption of students our to student faculty approximate in is continue with mobile on XX% academic and the the principal with of apps, We and now

and within During third while our campus. to and infrastructure, further which multi-year enhance student a included we quarter, the upgrades began project remains upgrades mobile enhance platform efficiencies several our student on track, experiences we project This confident driving the virtual will are that to business. technology these

to CTU operating the gradually the virtually. in performance and in person Finally, With are welcoming classes month. on to quarter. of and build like began campuses. now a over campuses an in turn the attend the deeper Colorado, campus substantially call Ashish would all will to new now students to to our out update pleased option gradually that with I'm CTU during of their the AIU ground Springs, next offering our for recently I campus two said, welcome back back XXXX review home ground Also, completed announce that students

Ashish?

Ashish Ghia

call and Thank to discuss before I and you, Please all Andrew welcome outlook, Andrew, results year discuss XXXX will comparative our stated. unless that back comparisons I the versus sheet review the and handing year and again. full his fourth then remarks. for the prior closing period are quarter otherwise balance note

a begin I about year-over-year Before quick reminder comparability.

August XXXX. CTU AIU acquisition reflect commencing And the commencing the XXXX. the Hippo on on for September results the X, for operating reflect operating First, XX, acquisition, DigitalCrafts system results

related no as for include operating close when or discussed, Second, because are diluted adjusted material. expenses per presenting expenses no earnings share, we longer income previously adjusted campuses to adjustments longer these any

also maintain overview us period have All adjusting an said, begin fees our associated prior With adjusted for that let matters. we certain legal of results. are to with comparability. with year operating amounts been Third,

in For against is the income latest and of adjusted benefit carry per material occupancy the a diluted an million, the domestic operating versus XXXX indicative the an bad acquisitions debt supported certain of a believe expense. well have equating the to income performance. valuation debt tax expenses. related operating compared admissions million improved the $XX of note This income prior year. the underlying the million, million million we full is adjusted the the and to operating $X.XX. driven in up was $XXX.X recall underlying operating we again We prior account in earnings range $XX allowance XX.X% per $XXX.X $XXX $XX.X excludes as adjusted to was to share, million. the loss Net $XXX of year completed approximately expenses share reflecting items as of due improvement Please versus year positive as share. adjusted expense, some which increase non-recurring adjusted $X.XX by ended X% for outlook prior income lower for marketing year as that $X.XX was tax significant year. balance. performance the to range with forward on exceeding our our primarily previously years, earnings million recorded year to The versus XXXX, a note per fourth more reflective for the measure operating increased operating million, Adjusted and $XXX.X year in more portion primarily two $XXX Overall, This the diluted our not non-cash that diluted with Please of credit overall by did X.X% year. of we improvement a outlook to believe on operating which impact quarter income, million to related reductions was foreign line compared and lower included was as well income bad prior

results. surrounding details additional XXXX some for Now our

million. company an $XXX from million, which the full of year, For revenue was increase X.X% approximately reflects total $XXX.X

by For the fourth institutions decline. X.X% with million, a $XXX.X both to quarter revenue experiencing decreased

revenue lag As adjust been continue well revenue to we And Having a the these on And in trends. impacting processes that, efforts total and to total COVID student XXXX is expect discussed will by XX factors student total enrollment compared to note, with enrollments. pandemic, to enrollments as enrollments to as earlier, have a we to most we revenue our there impact to continue result, changes Please align student as be marketing operating and typically XXXX. with our impacted of from overall lower various processes. changes said XXXX. expect as expenses

year the segments, increased student ended for comparability note our year the while CTU enrollment approximately total of lower. to relates Please enrollments XX.X% calendar positively AIU the redesign. as it the academic the at impacted CTU As that X.X% by was end, system by

a continuing AIU increased $XX.X to revenue do $XXX.X operating full nondegree students our increased in million. million. reminder, development income by participating million, increased increased offerings. by million, The CTUs income enrollments who by full to X.X% As education include total while operating not professional X.X% year are to and by revenue to while X.X% student year $XXX.X systems $XXX.X XX%

For both revenue acquisitions primarily lower operating income. growth improvement the was while segments, the the supported operating due in in expenses to

for legal to in the Moving responses and periods on defense on former prior was the higher and our to this of were million, due to associated $XX.X students. XX-K the Department of forgiveness other. quarter acquisition were mainly that Please filed to losses disclosures the Operating for comparative matter. the by million, These $XX.X loan repayment incurrence year the applications additional year and and with refer borrower the were than respectively. relating to the fees afternoon corporate in regarding Education information this efforts to losses

we income not rate negatively to XXX impacted year our XX.X%, increases tax was by recorded in The tax effect basis effective for for to resulted stock and was tax the taxes of income This tax purposes. compensation, uncertain bringing compensation. approximately million. tax of deductible expenses negatively the quarter effective for full tax by are rate turning effect income taxes, $XX.X the Now tax quarter, rate rate of the for tax of the annual points, stock fourth results tax tax in effect positions that of The provision an for due impacted XX.X%. a to

and Finally, XX.X%. full year tax will we our XX.X% be effective XXXX, the expect for between that rate

Now to our balance sheet and liquidity.

an cash increase full positive operations were cash end $XX.X two and institutions, the We investments. capital prior represents short-term $XXX.X year was cash over restricted to For related from ended flows year offset year the were our drivers million million $XX.X million of tax cash, of $XX.X This $XXX million with versus cash XXXX, in flow year. related equivalents, million $XX.X which the and for income million Key million $XXX.X from million approximately cash the $XX to outflows payments, partially of of by of repurchases, of acquisitions. year cash share the XXXX. expenditures

capital expenditures compared in $XX.X $X.X the XXXX, were to prior year. For million million

we full approximately expect to ground the X% Colorado, of capital upgrade to relocation revenues, the complete we as in year the XXXX, For be the invest technology CTU. Springs expenditures infrastructure and of campus at continue

us XXXX. let the for discuss outlook Now

calendar that to million year excluding XXXX. year-end full range be lower to will expect in This 'XX adjusted and impact redesign, enrollments income This from reflects million. income any the adjusted of between XXXX. outlook We student million beliefs $XXX our $XXX.X compares operating than $XXX positive current total the operating

total However, XXXX. student year reflecting gradually XXXX be enrollments. will Full decline throughout improve enrollments revenue the lower rate lower in will student than of total

Todd impacted by marketing well have As as enrollments processes. our as student the mentioned, related to been pandemic changes issues

in filed through going is Lastly, negotiated surrounding topics. as Department of a our Education process Form today, various disclosed the rulemaking XX-K

a rulemaking While any operational presented as undertaken impact initiatives, final to result monitor may could above. be we outlook that an changes the on these of rules continue have the necessary

the adjusted range share share, for diluted adjusted Now between is expected full XXXX. earnings versus $X.XX $X.XX in per earnings and the diluted $X.XX for year to

$X.XX at quarter share, in quarter the the These quarter, of income range to benefit adjusted with as first the same we adjusted lower to in a and of from of $XX compared to to of the the range redesign expect first well operating as $X.XX degree operating CTU in the not for million compared first diluted Now prior academic versus XXXX. be prior million, for to $XX.X million per calendar per $XX year the for the the year. as outlook quarter, XXXX, earnings quarter diluted This between to XXXX share benefits reflects will expenses the remainder apply year. of $X.XX

compared for a second income the As operating will result, lower be year. the half of half to first the adjusted as

allocation. commenting on by balanced conclude me let Finally, capital our approach to

which our to to continue diverse a strong designed sheet organic on completed combined acquisitions, available fully initial and in to including are evaluating value, We projects, maintaining stockholder balance related enhance We cash investing liquidity while balances. of approximately adequate benefit in during and focus consideration technology students initiatives, acquisitions the and strategies $XX a year, share which with cash repurchases. two particular million, was company’s funded with

discussion a pleased this approximately of Share as With from about call We reconciliations. will a we the refer Board XXXX. new commences to as are release of With will are announce Andrew his authorized remarks. factors program, repurchased $XX our repurchases, GAAP to share the program beginning acquisition them our we I to other well to Directors the non-GAAP of repurchase and on closing allocation anticipate of back And completed and today's and authorization, information earnings on of worth these pursue million March February assumptions stock filed in share underlying over our in for important today total XXXX. the we has part turn which XX, that end key our $XX when for call, strategy million the pursuing Please repurchases of with Andrew? conditions. a to that, our The million $XX deemed X, market based program additional complete currently acquisition since and appropriate buyback another expire will current have XXXX. to capital the two, intend remain opportunities that size XXXX. to we by will share substantially respect similar

Andrew Hurst

built you, Ashish. and proud that I'm the opportunities us. In closing, lie of have ahead Thank we of the company

educating and hard investments our While evolving like students regulatory and I of academic and their present thank outcomes. serving and would for may students year. all our work to dedication and focused term academic environment to ongoing near institutions the prioritize staff student our continue this on challenges, will experiences remain

now will line questions. for open analyst We Selina? the

Operator

Instructions] Thank Research. Barrington Paris from you. Alex with first comes [Operator question The proceed. the Please

Alex Paris

thanks taking Andrew, working with forward you. to my for I the And congratulations look new questions. Hi, on guys, position.

Andrew Hurst

Thank you, Alex.

Alex Paris

at I'm brought of of a you looking talk some law. a going and are they're since of up, of all? seeing around little which seeing XX/XX bringing first and to what there questions way the what it your wrap is couple of there it Maybe there thoughts you're Obviously, to Are terms The regulatory and thinking? get looking you ongoing creating overview XX-K you are with? anything we're you color the at that negotiated concerned and rulemaking, out employment, regulations What up. about gainful just they're that. in you're aware

Andrew Hurst

Alex. are eventually monitor And Yes, you be rule with their if to obviously they're look at tell list and of ends. mostly then they'll far It's what it that where to Thanks, as Sure. expected as think know, out I the we lengthy to were with difficult those administration meetings a the put obviously continuing you anything a topics, will continue potential would then process, very is happen as closely. new for one as Obama be. eventually open far difficult with have through and But to know employment that tell, administration. one the public what and gainful rule we comment, and then, gainful goes that's that because, would employment, specific a Trump again, about rule again, different XX/XX, as the

to. amount be at it's changes early we'd too just this would point, that forward. tell But expecting obviously, what going So, to some

Alex Paris

some when repayment, legal little from Any you've there? for I talked how about at? Also, been We mean, a got information bit fall, regard looking you students requests defense are And many this Department in of to like the provide the update many space, and fees to can that they it with others Education. last accruing. just you you. there? color Got borrower's the

Andrew Hurst

Sure. the on industry. best a But lot of the Again, information. that, little XX-K again, school would just happening, I stuff you there's be recommend, and detail the to the probably would lot a I every is things that, different. information follow think the on refer Again, Alex, because of the is in source of best going as probably what's XX-K just a

Alex Paris

will I enough. that. Fair look at

You challenges things for I Have XXXX. improved there? Army fourth the mentioned it assistance. with issues, there's functioning know the technology quarter it during an is by or normally now? platform Is tuition the the in clearly impact normally functioning

Andrew Hurst

And that, I improve to ways Right. that not it as as certainly efficient find But to say going tried is work I not at as hope again, point, with this it forward. and think see was. it's would we to again,

Alex Paris

the Got doing the your third things you. run. little this about that And is you expectation have run, short The marketing going? impact student in on the we quarter. it What in a on with that but long there are made, that should macroeconomic COVID-related issues you it negative talked combined changes bit could improve recruiting was a and how

Andrew Hurst

go impact what as guesses that. was as long And on? think as improvement long beyond the impact we're student cautiously to the some question, that said, part And optimistic to difficult But really in of far pandemic, know, to as the to have the how parts any I there, as continue Two is answered. second we any, seeing of I again, relates Alex? far be something to It's, engagement. us as would it that's One again, watch. we're how

Alex Paris

short-term to successful? students The be most you specifically? would are Are have impact What marketing those we would embarked that? on initiatives And be seeing that on doing enrollment? to target that likely there you've to that

Andrew Hurst

of on technology we on I short-term students think to the applications, this some the early have most far But data really feeling as the feel the again, enrollment point, focused in is that, would as again, amount who that. And programs in people on is, those to as total our too in we impact the the to we time have impact successful it's as far would that to there succeed analytics outcomes, that are just the programs. is at those find that opportunity increase tell. and

Alex Paris

negative, then And in think throughout with you. XXXX. total off start mentioned Ashish Got negative student the I enrollment the fourth It'll was to aggregate. quarter regard

[share] And cadence [ph] so I of would the quarters. ask you to

end said it realized of the it, does end positive we I beginning correct? the but total it'll be year. negative at where move will should And as enrollment does of inflect the full bottom? forward. I But Ashish, versus decline it of year, rate that the for you student before the be diminish the Is year? at of the year think the lower the

Ashish Ghia

student Yes, decline mentioned, improve. that but will The absolutely correct, as gradually rate be Alex. total is enrollments of lower, will the I've

see As marketing half lapse Todd the benefits total question, to improvement Alex was will contribute where to strategies. they the that enrollments. is initiatives, your of marketing what in to start is talking earlier second some may that and the about And we of gradual

Alex Paris

DigitalCrafts that. My but AIU, not right. Hippo, CTU. operating they've for them All that part of Well, of as thank and so you you least DigitalCrafts have for you. last at actually and months now with been, six and been a of Hippo any on part realized I updates one did income, has impact or material on DigitalCrafts question Got was

Andrew Hurst

go. deeper as said, point at see early their the could material and again, at it, Actually them, But, go. more the get look we're about the into And that potential of impressed exciting getting impact. the with as the to management it's opportunity to work you them have a for their where deeper They we're teams. impressed know growth. to are much potential have with more we this we But very with market, we to great too it's

Alex Paris

I go thanks Well, queue. back in color. it. Great. I'll appreciate additional for the that

Operator

additional Mr. time. no at Paris. questions There you, are waiting this Thank

the pass conference So I'll remarks. to Andrew back additional Hurst for

Andrew Hurst

you joining We for next And forward to quarter. Selina. today. you, talking everyone with us thank Thank look

Todd Nelson

Thank you.

Ashish Ghia

Thank you.

Operator

quarter you fourth Thank Perdoceo earnings XXXX the for Corporation your conference That participation. Education call. concludes

now may disconnect line. your You

Perdoceo Education (PRDO) 25 Feb 222021 Q4 Earnings call transcript