LOPE - Earnings call transcript Q3 2018 | Grand Canyon Education, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Q3 2018 Grand Canyon Education Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference call, Mr. Officer. Financial Chief Bachus, Dan

You may begin.

Daniel E. Bachus

Thank you.

on Annual discussed and on and by statements. Chairman me today reports results contain We involve a current to no turn are And is to GCE. our with Report quarterly different and These could of reports that investors on statements results I obligation our Brian Mueller. will the that, expressed risks updates we SEC that filings, statements any call with over call and XX-K, Form XX-Q call all be CEO, forward-looking forward-looking Various Please review Form actual on provide during such position our including in comments the factors Form undertake cause Joining our our Brian. regard today's will uncertainties. from taking note future these financial materially in many this recommend that before made reports implied X-K. to to thoroughly or factors

Brian E. Mueller

to and fiscal quarter XXXX year afternoon, Education's third Grand call. Good conference Canyon welcome

you formerly that University. to of consummated on the operated the Asset story GCE GCE to with X, new quarter's Gazelle conference those For call, or missed July Agreement Purchase and owned an known XXXX, this as GCU, last are transaction Prior university.

service into GCE related university. GCE provides entered back services a connection GCU intangible services and to owns As in the a since the and result related and now pursuant assumed GCU fee assets currently to for technology comprising of Agreement, and the marketing improvements and In services, X, XXXX, return GCU GCU revenue. the property GCU's campus, of identified transferred Accordingly, counseling technology several university university. communication office Services closing, discussed well real and GCE related the tangible GCU. a XX% the and operations GCE's And services, Accordingly, academic to long-term as July this transaction, one call client, the Master to and results assets. operations the support, as as reflect to and liabilities operations and academic which provider of transferred GCU with tuition operates on and with

XXXX third the Canyon Grand of quarter at enrollment University at During grew X.X%.

adult GCU's working in attending the digits grew expectations. New which high-single students exceeded campus online year-over-year,

to which the New enrollment our quarter expectations. year-over-year, GCU ground third following idea future, in give in services the to offer the offered digits To am of you also universities traditional high-single providing I and size in increased other also of scope the an GCE could and exceeded summary.

an also to The Sciences Science curriculum sets were of a First to Science the select all from nursing. the outcomes content admissions of programs, learning in the new to four GCU in want the remind Science new is requirements, in of Information it programs of teach development that in the with I responsible program. university and public Science is in in the faculty Master emphasis responsible you academic area, the Bachelor requirements were Bachelor a Nutritional and Health and for of It implementation. Nursing sets Cybersecurity, Management, Bachelor for to new programs. programs released health

revised or XX addition, that In there and programs certificates were were updated.

practice theory also Second, professional recruited a training faculty XX success, Examples boosting from trained. additional the first of from services include; classrooms. collaborative trainings XXX the and faculty creating faculty adjunct to experience of were and there student and year time development. sessions and full area, these XXX were There

all scheduled a information decision order necessary students exceed key time were scheduling work continued XXX,XXX aspect in to time, prospective financial enrollment Fifth, of a were admissions was evaluated, on to average enhance calls our touched. uses aid, with they in Third, instructors in-house class to files total provides area, to students platform a of goal. make size our technology in advertising classes online process program. developed seconds. the provided Ninth, were learning of an the September. if as supporting a an the no which was missing start in will the in GCU efficient transcripts provide of future, tool grade such environment, were finance to an new during during provide XX,XXX behalf rolled Seventh, and with XX out Fourth, area, writing built This average students XX,XXX calls support, including the students of in license allow and or activities placed to writing students, the to and our to counselors documents, work. XX practicum and changed. Eighth, We follow-up quarter, on feedback attendance, in GPA academic concerns, changes, welcome schedules hold for written and a coverage XX% the activities XXX,XXX additional in course machine actually or the to tool need we our will performed Sixth, students. in answered technical reminder quarter. third very feedback calls, hold,

programming, real on of This environment it allow a and at to us other We resources platform to traditional built and cloud GCU the world provide also IT both traditional for with do began courses. our courses in we've scale. problems and exercises campus templates online a and required will cybersecurity, enhance the pilot

We surrounding specific intelligence, to reactions artificial continue aspects identify automate the to and process needs. apply all support to analytics use student deep learning of

of discuss at universities work clients. In the new with to process GCE possibility adding the of we days, partnership. continue We future XX five next meet a the to will

at than Bachelor's, The ability more levels, environment. an is million are the technology and of $XXX Doctoral levels characteristic who at online to students high worth of GCE degrees pursuing scale of in support quality. to Master's differentiating provide built have our We

take to identifying quality at time willing continue right them the who have are programs will in provide partners We our and to scale.

the in our months progress on to information more come. provide will We

statements related and increase X, $XXX.X $X.XX in fee quarter million university an was the prior XXXX the do was presentation operating third the of university to of operations meaningful that impacts income the Service to X, as expenses transaction. will information by the of to lieu university million are as quarter results more in university more that third excluding compared of million provide quarter the in Adjusted operating results of made of million as represents income increase $XXX increased related university for net of of fee In and the as our the XXXX, in adjusted changes adjusted July it to the third and million in Turning an and transaction of operations, $XX.X million, of third of XX, excluding grew third to XXXX incurred year-over-year and year. GCU's XX, year. transparency of are to September loss cost state Note taxes XX.X% quarter lieu commencing the adjusted new this operations lieu of margins quarter presentation impacted XXXX. enrollment the September in Dan X.X% $XX.X was the the earnings provider share were income the for was third prior rather transaction presented each but revenue, the reported technology and the related as at XXXX, were and XXXX and include reported have of to taxes in quarter X.X% third GCE and the XXXX financial respectively. significantly contributions lieu provides future current million incurred this prior expenses GCE third third comparable respectively, the made XXXX as and a XXXX, XXXX, conform to of XXXX, will reoccur per on GCU, made margin quarter XX.X% of the taxes period the and anomaly, and XXXX. expenses $XX.X few revenue state GCU's these would X determined classified an was This Net transaction traditional declined and the the as to XX% ended XX, discuss contributions GCU third income XX.X% to and a on related the three the incurred $X.XX the regarding GCU $XX.X of as expenses ended earnings GCE's be in quarter service revenue an XXXX, for the quarterly operations university-related XXXX compared of the was of operating months costs The on while XXXX, the in in increase presentation. for In our including XXXX. enrollment. ended as transaction September income student to for changes expenses quarter resulting income service of detail for consolidated of net from July income income comparable XX, million million third $X.X between and $XX.X $XX.X were of related provider. the XX, the margins of state that quarter months were contributions and basis. tax $XX.X of reclassified occurred operating increase amounts in After respectively. the state in ancillary transferred in a million, related million contributions $XXX.X between we periods XXXX. current of impact $X in of service margin revenue XX.X%, million the reflect XX.X% not they income service quarter as quarter, costs third quarter, will revenues been lieu cost operating for of third of the for to its that for operating million made in Had in to of state contributions Adjusted and adjusted due three XXXX, September would and and minutes. GCE Enrollment increased the of income reported in a taxes but transaction XXXX from comparable $X.X the quarter in the September in to in not these of compared the The from increased XX.X% taxes respectively. of share revenue, per

indicated campus exceeded earlier, As students attending year-over-year, digits adult grew new I high-single online in GCU's the which expectations. working

our also between student transitioning exceeded traditional to enrollment This data increased percentage of an in revenue comparable a company result XXXX. statement digits year-over-year, which a in for X, revenues not quarter. July high-single associated periods education ground the the third of as also service expectation. of The is reduction is income the New a with as provider

related Agreement, university entitled net percentage ended for comparable of the As XX% which the XXXX, revenue, as is revenue the which three XX, revenue percentages, and adjusted months fee net in under basis. a tuition Master is non-GAAP company Services GCU's on company non-GAAP to result, the revenue operating order compare expense adjusted net has calculated September to a the of of

based increased This million employee of benefit our to – quarter reconciliation grew these to in from XXXX, enrollment the refer in number reported client, in expenses Form of release. has in services to adjustments the academic was our $XX.X third years. tenure an related an quarter GCU, and due or compensation a to the amounts needed third our between to and increase and increase to For costs growth, $XX.X support due of adjusted increase $X.X please XX-Q, and staff increased as X.X%. of the of XXXX Technology increase million equivalent earnings in salary primarily million compensation

a the This basis and to XX.X%. percent and million to a quarter an years. revenue service XXXX, the and rate points offset $XX.X XX in increased needed occupancy to of the our benefit third is expenses million increased our savings by increase our and grew dues compensation million base, across costs. from lower in provided increased partially to in XXXX leverage revenue between technology third growth. employee quarter to and of cost of support its GCU by of due enrollment reinvestment and services of primarily increase $X planned the and of due benefit employee depreciation ability As in costs personnel travel comparable X.X%, compensation Counseling expenses Increased to decreased increasing an tax or these academic portion services $XX.X costs

Marketing to increased and and portion employee from costs in – XX.X% XX percentage This a costs. third tax XX to increased increased as benefit XXXX to income revenue, years, the quarter QX million XXXX. due increased third expenses due between primarily balance of these XXXX XXXX statement, As would end in percent color of million the to of rate our to as X.X% comparable from increases that, communication due give revenue a from at in XXXX. on as updated compensation of and over $X With third be X.X% the in Dan and and made lieu $X.X enrollment provided like CFO, and well points school of comparable reinvestment savings $X.X by that to financial changes basis little in percentage of in other quarter. taxes the planned more of of million from organizations basis the expenses the the points items, transaction. about income lower fourth the quarter XX We our anticipate primarily to XX.X%, XXXX. comparable XXXX a of of a revenue, guidance, it increased administrative GCU's Bachus, General increase third was basis at provide points QX talk to XX,XXX of a three quarter XXXX turn contributions to quarter, quarter in to state sheet sponsoring to us of in will I impacts as

Daniel E. Bachus

Thanks, just-filed to our is about minutes financial Brian. spend At the our impact a first, in to on transaction described statement. footnote the of The detail X I'd in financial transaction statement. few like talking

and balance remaining student's assets by company property income sheet of provided net share-based Asset is collateral the credit the by items of modified loss of the income of liabilities employees income $XX.X obligation that by held to employees, retained the including assign transferred liabilities GCE at were deferred transaction from assets, accrued ended company's September the until the resulting perspective, However, monthly. cash GCU, these GCE is of Except statement on the responsibility and and the regulated consolidated university certain the the formerly the agreement securing considered ended certain GCE educational might by employees to due reflect impairment $X cash operation. the that to an company's liabilities, of Purchase was million million the part company university-related the under assumed upon secured was XX, for $X.X cash such unvested the statement $XXX.X cash, $X.X obligations operates expenses I'd expense, in that agreement our has university GCU three lenders restricted interest and during plan U.S. transaction. administrative Included issued had equipment note deposits institution, a asset financial equal on Education working as to identified the guidance our $XX.X stock arising business a flows. agent and capital transferred reversals university. of of amount and that note, of million receivable, XXXX used fact under ended and cost the and of XX, Services transaction and million some including included included closing, of a $XX.X million XXXX, covenants the and the is of to in other balance released the transfer amended representing also university for on you equipment during balance. we cash million, the million, with as earns $XX.X connection collateral three related all credit reduced liabilities due we secured and certain $XX.X from like expenditures. third GCU by the securing and the From X% funding liabilities, employer to in restricted accounts In our was and net amount forfeited as no highlight compensation for company that fund to closing. of transferred expense assets and quarter, revenue loss pre-closing student approved months notice on $X adjustment capital the to cost time under restricted for perspective, the regulatory included September the months statement of grants deferred share-based Department credit From compensation transaction, collateral three The related the than received million part been university's furniture agreed previously and stock Master that estimated million. less that cash of costs. The to collaterally sheet, of total the longer employee-related was company the agreement the a that The the a Agreement, education-related transaction transferred modification of the modification, just provided our such the payable million, the the on of months and of that the transferred for was for Interest the Agreement. vesting cash The the to held rights by transaction were less not million for income $X.X note to assets slightly restricted that expenses of employees of of compensation transaction and slightly million the tax timing we transaction $X.X $XX.X than in million secured campus

fourth timing As will will be projected quarter difference slightly discussed reducing income. continue interest in our later, the this

the capital provides related future they that of reoccur income two quarters third to to in transaction. current the will a prior our the our an XXXX XX, a the of traditional a million of present discussion, in incurred remaining conform have GCE day these X% XX, net in and regarding on transparency activity. in to believe amount an restricted of traditional is the result operating and million were million XX ground more in first ancillary in Revenue arrears. adult we in June we the and $XX.X changes as the effect four more for XXXX, the timing that on being start have $XX.X represents quarter a also made cost the during the minute. The date GCU's the that in cost With discuss due an a disposition on will X to quarters XXXX $XXX.X the As for third prior on averaged is as exceeded quarter transferred to transferred Brian related I the prior funding during not revenues. is and service quarter expenses presentation changes $XX.X incurred will of as XXXX. its fees Service of client's provide working the This expenditures sorry, XXXX to alluded meaningful are programs producing quarter in the the million million result our We considered in cash in reclassify provide tax capital of XX due between residential statement or transferred which would university as this each resulting increase detail for increases $X.X fourth due university and increased financial the will activity. to of now to presentation. capital with periods of ground be investing expenditures I primarily to June service enrollment. XXXX, September the for quarter, in in in during net GCU revenue adjustment of From effective GCU the expenditures the is in our years, quarter and perspective, our way increase GCE the are reported a year, the presented to his a working its related students GCU new as reclassified expenses students the also of student – XXXX accounts not raised rate third receivable third information, and and amounts The of provider programs transaction as and of of been footnote shift of GCU the as flow had XXXX. paid but from month in at more per on quarter I'm has expenditures reflected color a paid transaction The the higher capital of capital higher to the compared that, million XXXX. the the enrollment of cash as third revenue The investing expectations to cash closing. part university cash $XX.X XXXX tuition impact less. one percentage to and slightly tuition of

quarter XX% of to and cost XX.X% to organization. contributions maximum X, XXXX. reduced in is The to our from the school result effective quarter the flat income This of and sponsoring a rate tax The effective rate Cut the income in to was decrease taxes into law quarter the rate in year-over-year tax years third signed is related for XXXX. tax compared the the XX% Act, the a a transaction, Our rate, of December of XXXX Jobs the decrease an occurred lieu January corporate rate lower due XXXX. effective third Tax increase in XXXX XX, was between which third XX.X% our to of act a the result on tax effective federal of lower of during state

XX.X%. December XXXX. extended of our $XX.X expiration XX, our authorization XX,XXX at estimate of third in plan our income of quarter XXXX QX lieu of the under in previous rate, XXXX to We made on in our common the $X.X our income of available Our And transaction increased XXXX. repurchase million. contributions XX, and We QX repurchase tax September which contributions million a in excluding cost from is state effect made directors taxes of taxes, share to have lieu the million shares stock $X as million of been in slightly had date higher the would XXXX. board XX.X%, state $X.X of of repurchased We've than estimate approximately the our

million. Turning unrestricted XX, cash represent and XX, September collateral flows, as short-term to as were XXXX, the balance sheet agreement. credit investments total $XXX.X and Restricted equivalents the million cash cash and XXXX, on were the cash $XX.X cash and of September of

the We project, not impacted We've this As software million of be will million approximately was adjusted of we updated of XXXX. in a accelerated graduation. start. enrollments in $XXX of projects, will the behalf in our of will anticipate was XXXX/XXXX estimate parking expectations, halls estimate or university year. for semester lowered million development operating $XXX,XXX XX.X% the net down from and greater related. is guidance range that Through We quarter, This $X.X XXXX income the the year being we provided few approximately will color previously systems approximated be funding million interest the $XX.X quarter on CapEx year. and third timing mentioned I and X.X% notes to the but provide revenue. quarter our to in graduations the would of now estimate of second earlier, than XXXX/XXXX our fall on the the through primarily primarily our estimate a to have the Interest previously interest impacted We GCU's in revenue half due in and would the in school in higher-than-expected estimated CapEx previous be XXXX. million $XX our three CapEx for fourth in and have the X,XXX is due differences Revenue but the fourth GCE's Brian negatively be We timing secured $XX residence enrollment expected the university's of by annual like of XXXX expectation. income graduations the school or funding GCU capital will between financing. tax related is provide for and end fourth garage color million, our second expected GCE expense quarter on funding to the Last, of effective anticipate be of income from years. quarter, $XX.X finish in respectively. income $XX fourth fourth be XX.X% quarter, greater seller quarter We the moment. guidance, quarter the and in which We the now XXXX fourth as to interest fourth of are quarter million to in QX. than provided apartment-style have rate more

Although repurchase estimates not XXXX, I final repurchases. we turn a thoughts. these might over additional now shares share will back during to call assume Brian the to few do

Brian E. Mueller

like President say of on university. to a of words would I GCU, behalf As few the

Our traditional average was campus class new over GPAs new X,XXX incoming class the was incoming of approximately students. The X.X.

now districts in X.X. now school the advisory Our boards. with average over have about involved students and over internships Honors now are College incoming current over on those of is year. students school GPAs There We represented X,XXX X,XXX XX boards with in XXX hospitals companies,

now XXX and colleges certificates nine programs, offer Our areas. emphasis

involved which and includes have in XX,XXX club sports, in clubs, up in over students anticipate intramural and We theater, over in competition dance, are students sports. approximately student students X,XXX to XXX students have now involved music XXX debate intercollegiate XX

athletic last Our Conference year, Directors' programs, we division and won win won the Western a XX Athletic in again expect Cup this to year.

We To halls, campus building. three building for a at parking in new style are apartment student halls. new and currently capacity on are growth support the we next new year, residence a life garage the a our traditional residence

years. in growth that year-over-year recent also being of graduations. pressured being This it is of but total program summer. with due during traditional by four to significant students growth caused however, under to in enrollment, high percentage reason approximated total across (XX:XX) country to students graduating that expectations, by parents enrollment and is the note is are are the the attracted another taking that students our our high expansive our important increases credit is result online courses dual schools in university. Our is the the This enrollment This not and only the

year-over-year year, the will in transfers, rate anticipate spring to spring from have population have semester discussed continue each that online see growth GCU's consistent see pressure graduations of past, to in to been fall we year the to student increases we we enrollments primarily new starting while grow. is in decrease also continue fairly growth as As in spring the year-over-year year, a graduates. to in

pleased for families call can I recently which near recall, during As students questions. XXXX, proposition the to has important the significant our extremely the of be rate, to to numbers with third the continue quarter I'm Access growth far second estimate Institute very less less of continued students go which Success, our according Significant very graduations into the because graduate of cohort graduates debt the is and with listed College start and quality makes quarter so we up. It cohort quarter. those private of graduation end that started will the These for students than facts fourth to and have to average you go up, growth we coming new our online over rates the university now completed average year-over-year debt the student. the GCU's of most also value GCU's along attractive. will increase online on accelerated will website start answer and in that XXXX. X.X% ground your low to than turn a to moderator, The and note are state in the university student default continues GCU's

Operator

Jeff from with comes Capital question first Silber BMO Markets. Our

Jeffrey Marc Silber

transaction, things so GCU I'm post either just much. this student me? an a or employee you changed at if at have I'm GCU at for all Thank wondering,

Brian E. Mueller

they they made online things quality high of support we the the electronic or the fact post The would quality a if students. facilities, ground things, they're changed we care. that amount laboratories, don't were that student true happiest the for probably have and the asked at The transaction. very of all have the couldn't not-for-profit you the around absolutely programs, the and students campus tuition And classroom, with that raised would it for-profit get The those same are you, the nothing their told programs, for the and the haven't classrooms, of GCU, our affordable. If you're tremendous has thing on no. before, them if really transaction, the them be

that but were If doing Master like some we e-mail that of changed. students, behalf terms service addresses, the There up the our and that, that. of previous their an some on technology, and you're to much slight not we dealing outlines changes has Services we're changes, Agreements of job with there standards about were the clearly level keep employee, doing reporting in are work things so

what's going in becoming but there the As last days, in more will lot. terms we be changes, other some into move a on of aggressive serving not XX significant in universities,

Jeffrey Marc Silber

yours the take initial Great. color over terms few that can And traction programs Okay. just where know the a company partnerships are is a you in most and said, OPM, your of providing like of from online comment. months, providing traditional the segue me give discussions, you getting potential on type you'll services in it next most provide? us more services I'm let that curious last offer? I like you just of other interest but Is some it

Brian E. Mueller

adult the us and into consider that We online a providing services. lot is the market The those programs the lot and their are bit Those Universities program the fact able a not to have to very to of put deliver scale. transcripts, back OPM's universities, that their get services. aid building around built more to in processing an wanting kind format. office little services are definitely selection, functions doesn't vital. on pressure away efficiently, around of very, of the that thing work, be changes, be to to that counseling The internal them which the very systems handle back that, shy scheduling, can a of schedule of processing schedules. around automated do office that we from financial the all It's online attracts of wanting the

taking Grand taking before, tailwind not-for-profit seen in And be Canyon. see so, we'll of little out are bit of going that a know we all one in right time that Other going We're predictions that goes as bit a our time. beneficial. how our what of lot that forward this of with sure very and than find that we've you pleased that... I a interested making to seen because There we're are September – October, partners little and we're we're are standing why which a and we October in said can this. and our going forward. is status. the build getting that relationships We're except have August, of mutually making any long with not we We've

Jeffrey Marc Silber

I'm sorry.

Brian E. Mueller

Go ahead.

Jeffrey Marc Silber

disclosing quick you are of terms online campus? no question, longer enrollment, more GCU versus in one Just

Brian E. Mueller

helpful it's number, to Right. forward just We keep one and probably that number yeah. think produce more going

Jeffrey Marc Silber

Okay, Thanks so much. fair enough.

Brian E. Mueller

You bet. Thanks.

Operator

Meuler with comes Our next Baird. from question Jeff

Jeffrey P. Meuler

you. Yeah. Thank

relates obviously, So, how terms that's us is we any out? are to us headwind out GCU having? big in graduations high you growth just in sizing online step the you at what up can a of problem you're enrollment it should the And XXXX as there's guess to I trying are building the Or in is a that the cognizant But success graduations. university of? increasing that if to call just trying signal that of you be give calling class to

Daniel E. Bachus

there's No. with. don't hugely think Jeff, to concerned be I anything

seen little we've we've November, especially the were and to the in what really on, when think surprised mentioned the the graduations, in two look half students think little how so first we for students start the original I over far half budget – we were for to a and we and of year estimates at month, November-October, bit our I it use as where will We of are much last a far the in by pretty graduate bit year that year. right second seen September, graduations spike.

– those in in large on So, XXXX groups now. really had cohorts second I start quarter started the graduations – for think kicked of

in growth look don't signaling other that remembers next So, large enrollment for model no, long-term their I big objectives at we're any year. everyone and to in appropriated as cohorts think for our shift sure make they growth factors about those just than

Jeffrey P. Meuler

Okay.

Brian E. Mueller

two – add we issue large those online issues. which that that there a separate acceleration to to is of now we're getting are The starts, graduating. Just that, we the cohort had that

being really that's start offset Fortunately, months. strong by

what downturn. you said, echoing can don't significant we So, any expect think Dan

is. it side, ground the On

are credit a thousands or in, the because program earning credit are credit major dual country or students and that they we're dual of that have place add universities. across go with in either their through program becoming through other can a three very very years, We and aggressive they a finding students us minor. attractive They're can they universities add a bringing second can

$X,XXX is that we're counter to new budget to now our and so, sell offset right through does thing, only it's strong to the parents, going not increase to next for year that $X,XXX that average in or the positive a the board, and can our you student campus you and tremendous. the campus and year room little is because opportunity if three can debt pay tuition tremendous for graduate on graduate on value with to such And ground start that the process on campus very to no is years, but work for thing a proposition

starts so, front use the end. new on just our advantage to to need that we to And accelerate and

Jeffrey P. Meuler

but certain university quarter, trying are or defined is Why confused, be are on adjusted think that along a – lines? in on an nature. taxes. big just in costs. benefit that's I from perspective I related this a I transaction to, $X.XX the things phrasing terms one-time this you which the to and offset stock income would $X.XX in there quarter, compare guess lieu that on of And have I'm vesting it. I I prior state have the But mean there something those guess, get the this rate? the loss but net just get comp you EPS EPS little Got expenses, way, made you're contribution excluding this of just figure. the guidance different Or don't something, something maybe why to you tax timing is or expenses so in there guidance income a prior The quarter? impact a I would to think a in

Daniel E. Bachus

have Yeah, that quarters credit quarter this, of dollar the get fourth on in of get a administrative XXX% for third we you expense in we remember We and the one three that we but when the might dollar dollar contribution, the quarter although to payment. for make quarter contribution as quarter. the third credit dollar general in record

not expense So, a the does and on it XXX% because third third of you're slight taking the material, in a tax in expenses the the impact XX% quarter of quarter. slight but EPS have reduced

Jeffrey P. Meuler

What's this $X.XX assuming?

Daniel E. Bachus

wasn't assuming The that made $X.XX is the contribution all. at

I EPS don't – wouldn't you in, because take because a think $X.XX guess I is, the if on you I changes I leave out think And my so, focus it if it lot you're from transaction in or that it and don't again, $X.XX huge worth million well. Really, talking about contribution what recorded. of amount. expenses not reported $XX to $X.XXX the is were as the a maybe gets that But there's the that probably you

Jeffrey P. Meuler

Okay.

in $X.X you're just pre-tax or the that that So, you're million that's amount. $X.XX, line showing describing the the

share So, $X.XX on after per it's or tax less? basis an

Daniel E. Bachus

at lower is it, million which tax G&A, it's you're then within benefit that calculate $X.X To the expense the getting $X.X Yeah. expense. and is million,

Jeffrey P. Meuler

from Okay. of in benefits to just that into And you're see? you a marketing then, more in just Can recent as detail Brian, terms to tailwinds other marketing the efficiency go comment the some on you're there not-for-profit see months. starting starting or

Brian E. Mueller

of ground But in our impact side, the students counselors the talk the which next It's traditional throughout school there see districts won't a status. partly we allow that August. until had because are country just to to really we for-profit on that wouldn't

class strong we couldn't our so, new And get result a places to a very past where get. August, abilities as we expect incoming in in of the

month in of had start We good just time. a very way they're then I we We which if extends that knowing. flat yes, efficiency. we fairly to is advertising In no of the start very grow higher education amazing. big August We'll in When of and see kind is of we well. market much increase, in October a had long have conversion XX with slight a years as there's maybe for have efficiency, as the last period good but it it's online, big so are is September, came in because months the months terms wouldn't difficult back say months, – or us for the

but these goes. just positive huge for-profit no minds that because which recently extra of knowing historically overcome had was that didn't should phone the how up We And to sign. spend status, months be able strong a were positive we without the way in not. people So, have additional But the bit fact a it's see many, thing, pick that where of is it a a little for-profit. of we'll many we just

might that look January tailwind in we're a final we and going and obviously, assessment November see things of how February and watch, what so, be. to before And December make

Jeffrey P. Meuler

Thank Okay. you.

Operator

Our next question comes Jaffray. Piper from Peter with Appert

Peter P. Appert

Thanks.

the get sign the might So, terms with clients, of new potential any of of more of you of tone first able to client? in having sort any be timing up thoughts Brian, terms in and you're is it when the discussions color possible to this new

Brian E. Mueller

The members. going in next well hope taking three be or because four that months, next we're start so year. of Things how you see interesting to tone in We'll at the our that that to meet reject, is applications or your peers is things well-branded August ready Grand happen very September Canyon will We Again, you are University. that important time. goes. we number are say the old of of with the that very their which of days, The U.S. and almost you, those one things combined institutions what two have of some faculty XX% about measurements certain foot who in the

Report World & rankings. News

private the discount willing to $XX,XXX $XX,XXX, back their hand, go are debt school. to a rate to $XX,XXX, year to spend just with $XXX,XXX aren't worth universities people other those same struggling tremendously university On because incur of and

especially this that efficiencies, industry, universities. unbelievable created model, so is for tremendously model disrupting And private has the this we've hybrid which

is years to middle, here. to want in you the or many last you somewhere about you And Do There to what's play the they have Do are things happened play to do decide. want future, past? XX play the in so, so do to play? you the what fascinating where want in want

we're body students ask XX% really our science, virtue pre-med, very areas: in engineering, you If of in biology, cetera. income campus, our academic student information technology, GPAs, strong virtue a studying on et average and by really, by difficult computer building of

It important. at And to very impact XX,XXX keeping at we keeping brand minds. important something doesn't that your matter that If finding you to them population it the matters past, we it all it's ask them, them, have have all that online, their students. not working your increase thought the doesn't in if out people those would to negatively brand We're your was been scarce adults at – brand all. in attending have

of the part now, to or forward. my tone you are help that want so, – good going the of involved good to tone really get to the the going Do families do a them when important considering important And programs past you time, discussions what the – is they in in access on do what be people campus of career. really, to programs, daughter discussions of questions, get come have That's the can part our three job to a tell be feel academic you a all the a want people can considered tension. paying big you was I has have important with, are or which and son them. that One, changed. really what

a degree of a all or that don't important. surround thirdly, those, you the to a kids moral of answer $XXX,XXX longer or can And with no yes, past, thought with three safe? my And you son some little daughter amount lot saddled of do. what were campus that in help with your sense is debt things and is then, Secondly, become reasonable people there That's ethical of worth their can important time when graduate no want of you debt. important They And very or them. very debt. in standards

in it's focus teach with what in writing the best big involved their you critical education, finding partner thinking very we in sizes, so, a class early how we And get with on deliver We we teach And is career. solving. and traditional. about wants with problem keep our past. that teach on we're think We when kids small internships to professors, a

build deliver body, efficiencies very we cost. traditional we So, in reasonable very at how very and we're We're in this create non-traditional education. how the offer student university

you want people do interesting. what that but tension going of part the which of been and the we want that find past. future, think the and experiencing, part be has for in partner partner, so, clear be we'll are is we not it's it's right in forward the education vision who should And a what a And to

Peter P. Appert

lower, margin this Dan? I'm could Right. on all because context from revenue economics more conceivably of Understood. at the three-year How the right average could Thanks student for that program, be have the of this does that implications per the negative Dan, change that. it which for just students And perspective. then, if is business might imply wondering, a in work,

Daniel E. Bachus

Yeah.

they're courses the ground of lifetime dual yeah, had might As graduating we sooner you be courses what with those student the the less case now. look Definitely university those obviously, a – credit, online over initially they're the because value sorry, the discounts taking or if courses. at discount thought campus, the summer, than we I'm university,

which So, bit. the when no it's reduce might value university not is are But is all big the rates, flipside there graduation think. maybe lifetime a of does as higher the what all But little of together, student add good. you it you doubt rates, as credit dual higher retention difference a that

Is get thing these students, $XXX,XXX affordable. time, of all these other building halls, be are Peter, And ever to moving campus has is buildings, part just these forward? laboratories? debt. these more this is, for (XX:XX) The this that all worth technology been. going my why kids, way they to It is the of always me than important that, in our opinion, can't It is XX-year-old in the the it's ask comment that important traditional be you people residence experience classrooms,

move the to students of per campus amount that we more offset doubles come And which on student, campus, so, well, of as and that was forward, help doubles the percent that the get to years. we going our the traditional of – than all three revenue the live amount it

the closer the third we students year. And on a commute, even residence on to average when a when live students though are but $XX,XXX huge. charge margins And a less, $X,XXX on campus, so, we it's halls, get year,

offset of And by the three for years, kids on who amount partially are the get that's revenue the so, we living campus.

Peter P. Appert

Okay. Understood. Thank you.

Operator

not conference questions turn time. back this hosts. I'm showing I over at any And the to our further

Brian E. Mueller

time appreciate Grand in conference have call. reached third Canyon quarter of We our and Education. We interest the end your

questions very If you Dan Thank please still much. Bachus. you have contact

Operator

gentlemen, and presentation. Ladies today's so concludes that

now may You day. and wonderful a disconnect have

Grand Canyon Education (LOPE) 8 Nov 182018 Q3 Earnings call transcript