ZVO - Earnings call transcript Q3 2017

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Operator

Good afternoon and welcome to Bridgepoint Education's Third Quarter 2017 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Ms. Anna Davison, VP of Corporate Communications and Investor Relations for Bridgepoint Education. Please go ahead.

Anna Davison

good and Sarah you, afternoon. Thank quarter Bridgepoint earlier www.bridgepointeducation.com. release issued earnings and Education's is at third today website posted was Company’s XXXX on the

me and Chief Joe Officer. Executive Officer Clark, are Accounting Steve Interim and President Chief Financial Joining Officer; Vice Burkholder, today Andrew D’Amico, Chief

that the remainder the impact ability forward-looking, graduation begin, forward-looking we including guidance, current to or uncertainties in speak statements legal actual enrollments, persistence a our Please and of and extent to statements those other applicable forward-looking student expressed statements metrics bad we like our related risks the to the laws. could undertake matters, make required differ subject debt, financial of suggested of and from These that efforts, today you of future except obligation to number or that results light by to regarding the information in Before and we support remind may securities no note rates, date and events, to only as pending forward-looking would some we by or statements. and statements be considered later. are performance these statements commentary materially of regulatory forward-looking cause manage regarding update the XXXX these new of student

a refer including report financial for In On GAAP. our not Form the to to non-GAAP these Please non-GAAP SEC XX-Q for or Bridgepoint substitute for call to SEC time, considered financial XX, reconciliations our release measures release, the Investor that earnings with including be section measures the press as supplement ended information from Clark. Copies earnings GAAP our which today, pleasure posted the measures. be will Andrew results. filings XXXX, on a today detailed Relations our At that certain will results. SEC you CEO, risk our additional may affect should September by Note also intended are factors quarterly more financial GAAP description may financial of and today, with regarding well measures, filed we of as non-GAAP introduce find visiting earlier disclosures our Education's discuss U.S. these as obtained the of was my our this is website. the quarter it

Andrew Clark

welcome I financial Thank After quarter our discuss After Education's our Anna, Joe Joe you Chief Officer, closing XXXX will call. and my operating key Financial to earnings and our metrics. offer quarter third concludes, comments. Bridgepoint will Interim D’Amico third review results I

we accomplish meaningful have marketing spend. model plan been approximately strategy well marketing who analytics in objectives. beyond an implementing attract student. designed mentioned a the strategy this, quality enrollments and quarter to that have same by be with would wanted while improvements as efficiency I expectations successful combined Over marketing and year our call last in I'm earnings forecasted is our pleased a our of the high new quarter. quarter third On this to result of the a the second our negative amount the third performed working. report prospective internal I sophisticated that the student higher to concurrently advertising attract making strategy academically admissions us the of of to accomplish we students We updated probability past to have a To being two prospective key behavior allowing

detail New quarter changes. the how previously had decline versus understand the enrollments down better third working expected. let me we just described XX% the XX% in year-over-year third strategy To is were during the quarter

decline strategy Our on found decline a down efficiency XX.X% student XX% in yet in enrollments of improved new and XX%. spend this labor. be admissions can the inquiries declined advertising XX% and were just The by also of

in quarter basis quarter up XXX lead the current year. the homegrown new same our and the of the enrollments during rate at quarter prior from XX.X% improved by for our came year Additionally channels Ashford conversion when from the XX.X% points prior to our same compared in

also employers. various partnerships We to with our continue strengthen

this stronger best work become companies an strategy. corporate together. To in and input of area from we are for valuable gained the part has identity help the work establish new select brand important program doing the our utilized efforts name traction Our in currently we these the a that to describes

Educational The our program which we Tuition includes result Grant a Full or Development offerings previously name under Grant Educational rebranded program. was known have these the As Partnerships the employer Leadership Partnerships. FPG group as

Grants Partnerships added XXXX year were Educational During a and Tuition to partners. to FTG increase quarter the The these compared up programs ago. Full as FTG XX quarter XX% continued new third the or of in same enrollment enrollments

time the As grow examples around these retain partnering at an their develop, them employees. the students student types conversations of innovative without are of partnerships debt to and helping take continue skills to employers same employers requiring with education valuable any while on debt the of provide to

annual third XXXX. for XXXX of Ashford's XX.X% retention XX.X% for the quarter to reported rate the cohort quarter the compared third is as

retained retention, student than overall of on a corporate our work higher partnership part and number term increasing continue at our long efforts As overall population. our educational of students graduate our we on improving rate student students which level to all

best our adjust goals. mix are academic with students focusing achieving attracting the We their of continuing possibility marketing also on to

easily are will provide with risk additional to we them who may internal which student at order or projects more to addition be support allow like successful. a resources help pilot them in launching identify [indiscernible] advisors students to In be with

college retain University highest launched students. announced we last achieving our us to help In and attract addition, Ashford honors an as quarter,

average would effects efforts program to with X.X. efforts who anticipate GPA new the of We time. increased increased recently with students our seeing good enroll retention of We progress out prospective should is qualify lead all having over program. students to that the of Ashford reach the these for to an who

a among that and found more. the the high business, and skilled demand, planning Associates' been in industries the closing three jobs. development XXXX medicine, we least identified are XXX employers areas Data In as jobs. learning a regards have and of the in percentile jobs higher University economic and demand recent Signet, Toyota, higher XX,XXX because managers, employer have beyond; gap. and historical gap, cetera, few. KinderCare high name and practitioners, finance, discussed and focus administrators, highest key alumni AT&T, be and in to York modeling which just at students Ashford high The These EMSI closing are the gap, general their have have over accountants, the Insurance, industries. earnings XXX of workers at we transparency alumni lack for defense, data engineering, relevant or As can alumni. Life these degree by closing field call, company the the Permanente, closing we various or employed over technology, in students high an showed Ashford XXXX have provided of human workforce. economic New jobs skilled is demand, paying included the discussed as that require According EMSI skills being There for as as sampling study resource and positions in [indiscernible], entertainment and and and XX those Warner as on worked the the pay such to skills system, there of defined our of work gap, Time in skills to a high prior University for need students Kaiser These are educational wages companies XXth the across et

XX In or fact Ashford short and reports have of summary contributed from companies help mentioned LinkedIn the in Ashford showed at more In potentially alumni. students to just I've the build is where many skills industries employed that each least impact the gap. the have long-lasting, are

to individuals college improving to learning to closing approaches gap completion. we regards well as in and achieve new and developing focus attend continue to success who help Second, as students for want degree the education all access learning on to

XX logged in rate, in tutoring a his our course an be sessions helping pass in have fail some and these on continues which overall tutoring offered classroom. success students courses to program challenging part rate more Students show x demand our As our began have of offering free and results drop in to the positive reduction program rate. XX,XXX in reduction tutoring in X as of most over a the increase overall the efforts, continues

addition, In persistence tutoring have utilized a in higher students four next who completing courses. their

priorities is also student our of One the experience.

As calls, our we prior learning a recently discussed system. management watched have quarterly new we on

are the experience. outcome and user and a enrich to to for and several efforts efforts course the continuing classroom experience now positive working experience strong enhancements support we are on students. These our design We

short Center comprehensive National data today's full insight the a as a college opposed student and the new reported Data efforts of IPEDS data PostSecondary Education System the helping college metrics performance to XX, during Department Recently Center Integrated of for the U.S. closing gap Lastly, October by provide in are Education deeper our or for collected XXXX population. more the released including populations; these students picture winter Education data the of see as we XXXX-'XX two measured on new and robust Statistics transparency this more release students population. includes data. This first-time Ashford students provide new outcomes of whole. part-time view just complete first new more much non-first-time student and changes of time to a With students can into

in peers with to more national making type to the to comparison reflect for which changes students. we having be shows to full capture matched a students regard we likely the recipients have metrics degree at successful. percent including degree of nontraditional accurately to of and time the our the year overall. sector students outperforms earnings our the received non-first-time the retention our XX% mark with will versus at changes XX% approximate these Ashford Those been discussed calls more fact in continue mix the student outcomes Ashford the will to previous On of continue we've XXXX students expect serves persist marketing cohort level In that eight attract

these in going long-term our drive our students work benefits We three these and will and to continue will focus areas provide our forward our stakeholders. believe to efforts in areas

Now, who Officer financial the results. to operating our Interim I'm is pleased D'Amico to over Financial Joe turn and review to call our Chief

Joseph D’Amico

begin let key you, and some and ended XXXX. by quarter XX, September the information providing Thank for Andrew financial me operating

compared weekly of same the to $XXX.X quarter enrollments. revenue in decrease The revenue For to million lower $XXX.X third year. primarily period due for million the is was prior the average

as As student XX,XXX XXXX. compared XX, was September XX, XX,XXX total enrollment September of to XXXX of

for of earlier. the in $XX.X increase restructuring of X.X% the decrease quarter the Net settlement of were X.X% third a debt quarter or and expense revenue Andrew in $X.X of increase the for The third focus million or third marketing absolute year. of to part expenses revenue over $X.X or or the or of of million is and $XX.X revenue cost comparable XXXX earnings of as XX.X% was a as the million or were lower net per the of third revenue period as General the revenue of percent The prior was tax XXXX percentage mainly costs, of higher include the third as $XX.X by quarter which of have XX.X% year. is revenue due remains or any of charges. certain This was to million for XXXX. for and $X.X were third as and of our $X.XX to legal and and $XX.X our prior a to updated $XX.X the of facilities. $XX.X in third benefit expense administrative second revenue quarter to million to that expense prior of expenses the and third prior of approximately which $X.X level prior lease the year. of a quarter compared For of efficiency by is impairment was [indiscernible] relating $X for for for quarter XXXX XXXX largely to of X.X loss compared year. related quarter third X.X% compared the $X.X dollars impairment has as in executing million million of reassessing in the X.X% per percentage fixed the compared $XX.X third of XXXX is comparable driven this XX.X% of of of compared enrollments and for as we primarily as for assumptions primarily restructuring services debt million the the taken and higher revenue to expenses compared strategy expense time. revenue of revenue of bad result revenue $X.X breakeven professional million severance do fees, incurred third essentially We Bad or from loss XXXX a our of Managing share. a fees. to period charges The We a million Admissions, reduce million the quarter comparable for This This or had revenue lower million costs goal $X.X% the driven We the marketing is discussed recorded million diluted expenses of third well whereas charges and debt. XX.X% of incurred charges $XX,XXX year. legal attributed technology for instructional prior not advisory, quarter quarter to of quarter compensation, or instructor period in of compared of XXXX decrease lower the in support quarter million the share income settlement of services XXXX. the primarily the quarter well bad million.

We net tax our anticipate deferred year. against continue rate for full the effect a of valuation tax full we annual allowance and low a to provide assets

related million non-GAAP third Non-GAAP of net income and as nine Non-GAAP Our million large quarter non-GAAP quarter impacts. third our restructuring million for settlement charges expenses million cents well of management. related diluted impacts. increase million marketingship quarter legal due the per share XXXX tax XXXX third for the to was both share of is to $X.X XXXX. for quarter of the net per $X.XX or net for in third income $X restructuring excluded as excluded net impairment of and of the as or $XX.X income of charges disciplined income as part $X.X expense well net impairment and the income compared of This diluted income $X.X tax of XXXX

XXXX XX, XXXX. September million $XXX.X during $X.X company of period and equivalents, to higher the cash of as receivable company period XXXX September cash accounts of compared September $XXX.X was $XX.X XX, is of XXXX consistent XXXX balance last compared as our December $XX.X This million year-to-date operating in As cash, for of The ended as cash period to net activities Capital is compared to used The end million combined year. the and by business same the of cash during had same investments than with had September in ended million XXXX. company $XX.X the XXXX. $X.X XX, as million million of restricted XX, were operating $XX.X activities in December million expenditures period million year XX, cycles. year-to-date comparison the XX, the for

Now comments. I’ll turn closing back over the Andrew for call to his

Andrew Clark

offering has we focused forward recently programs to these Thank prospective you, programs Joe. looking announce pleased we degree for narrowing high our students. XX new new areas are demand In gap help and in that closing Ashford new skills programs hope almost to received are will we and are are approval to half which student in graduate on these None country. programs of the

We have programs out approval and strategic throughout university will are roll to received beyond. these pleased and work plan the XXXX to on these on programs a

XXXX future and channel. full of by a beyond. the to revenue to that come and continue the when be to our from deliberate marketing diversify be the news believe XXXX students high We anticipate XXXX reduce single due lower to for will mid that to our affiliate do various digits channels in percentage strategy year for foundational compared growth will XXXX We year

in enrollment compared negative flat quarter slightly We continue expect as be the experienced fourth the to to XXXX of XXXX. level new we of enrollment quarter to new in to fourth our the

management We non-GAAP which will from single be the EBITDA to grow to continue disciplined to expense mid low our with our digits XXXX should in XXXX.

strategic their ensure the that best innovating to experience outcomes more operator we in differentiated questions. of for some the in of will higher XXXX believe ways attract enrollments XXXX students student lead this academic consistency strategic will Our I’ll focus At of ask that priorities to of the to possible open the goals. these levels and student achieving which new our retain on and best lines your possibility and with phone produce beyond. We time investments institutions in began

Operator

Your Instructions] [Operator Peter Appert line Piper first question of comes from Jaffray. from

line is Your open.

Peter Appert

Thank you.

So us here the give what questions Andrew on color a of the seeing you're front you any, can enrollment volumes? couple of quarter fourth in in on inquiry terms any

Andrew Clark

of In so our outside pretty the expected been fourth we've think have date I consistent far. Nothing what to inquiry volumes Peter. quarter

Peter Appert

So down still quarter, that the would I level think at tracking third in you quarter? down you be fourth were you mentioned XX% in

Andrew Clark

sorry oh think I No, go that, I'm ahead.

Peter Appert

just right was of and that fourth that initiated you've wondering I in I’m the changes had translating improvement the some I was annualized thinking that year was inquiry the had in of, context in asking some maybe you the if trends? last in quarter

Andrew Clark

our were so of prospective of strength as expected No, conversion students the mentioned terms and from than of homegrown third overall in in our the trends saw I new improvement what channel. the we we inquiry I mean the in quarter just terms coming what better

If quarter remainder enrollments new homegrown XX% in of third almost you our into the came channel from the and referrals affiliate coming that approaching the from referrals channels. include with

in year new So our we made really students now coming where prospective have are after significant a almost change from. a

the slightly it will, consistent at enrollment new mean quarter, and on year-over-year this to at year, be our throughout I fourth a flat basis. it has our is you will negative been If view look the

Peter Appert

Educational Partnerships the Relationships? Okay channel and currently then total what enrollments the or portion from are Partnership of

Andrew Clark

year-over- question, almost students make Grant program, students enrollment those those up Grant this last the formerly grew quarter, XX% Development XX% which Tuition Leadership total Ashford. Yes, was program about at that of the about so year Full of good the

Peter Appert

terms And and what mentioned School are then seeing there? missed I of if the you you I but in Forbes this apologize it,

Andrew Clark

You of know and and of slightly Partnership total was our of large enrollment the to business in has it those that kind well. the but Forbes and think say single digits from success have not a it's that kind mid slightly due quarter around differentiation decline Forbes overall at It of degrees. part Program and I saw School has in enrollment we total lot that been would been that the more the XX%. is doing we are negative, students have with standpoint really we in a seeking the I Educational

Peter Appert

All the right and declines with we students should then in then FTG growth program in modest Andrew, per that the the there revenue might going forward? anticipate be

Andrew Clark

Yes, of as anticipate towards look you kind certainly XXXX. be could some would I think we declines there that modest out

Peter Appert

couple lastly side Okay just analysis on be we're equation, to your the company if of to has the of and for here cost end getting sort on terms managing rope I'm and years wondering quite more in Joe. in cost then of on wondering maybe I'm opportunity successful been of see that? mean the the of I done based if the the for the early you last

Andrew Clark

maybe Yes, in less. or give and XX maybe so him since since a only Peter, here like I he Joe been think has I'll for dive break days

we be us in continue that. will more management. we to on still the I terms and think that on new insight expense our bring So sit very ways disciplined good at have about perhaps think opportunity ideas Certainly some good done he of efficient. is a The could in date new company and which background become we really us focused call could with to with a has But his some Joe here. I in that to sport job

Peter Appert

Got it. very Thanks much.

Andrew Clark

questions. thanks your Yes, for

Operator

Andrew closing over I now Instructions] concludes [Operator the any call question-and-answer session. will our turn remarks. Clark This for to

Andrew Clark

All participation your want for thank interest call. Education on in right, your today's Bridgepoint I to you and for

Operator

This concludes call. today's

You may now disconnect.

Anna Davison	Vice President of Corporate Communications and IR
Andrew Clark	Chief Executive Officer
Joseph D’Amico	Interim Chief Financial Officer
Steve Burkholder	Vice President and Chief Accounting Officer
Peter Appert	Piper Jaffray

Zovio (ZVOI) 25 Oct 172017 Q3 Earnings call transcript