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Perdoceo Education (PRDO) - 2021 Q3 - Earnings Call Transcript
PRDOPerdoceo Education (PRDO)2021-11-07 02:51
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Financial Data and Key Metrics Changes - For Q3 2021, the company reported net income of 27.8millionor27.8 million or 0.39 per diluted share, while adjusted earnings per diluted share was 0.45,anincreasefrom0.45, an increase from 0.35 in the prior year [9][23] - Revenue for the quarter increased to 174millioncomparedto174 million compared to 169.1 million, driven by growth at CTU, partially offset by a decline at AIU [24] - Adjusted operating income increased by 28.4% to 46.3millionforthequarterversus46.3 million for the quarter versus 36.1 million in the prior year [22] Business Line Data and Key Metrics Changes - Total student enrollments at CTU increased by 7.5%, while revenue increased by 5.9% to 104.8million[24]−AtAIU,totalstudentenrollmentsdecreasedby11.6104.8 million [24] - At AIU, total student enrollments decreased by 11.6%, and revenue decreased by 1.6% to 68.9 million, although operating income increased by 51.2% to 8.3millionduetolowermarketingandadmissionexpenses[25]MarketDataandKeyMetricsChanges−Totalstudentenrollmentsacrossthecompanydecreasedby0.98.3 million due to lower marketing and admission expenses [25] Market Data and Key Metrics Changes - Total student enrollments across the company decreased by 0.9% compared to the previous year, with CTU's growth offsetting declines at AIU [15] - Triton University continued to be impacted by technical challenges related to the Army education and registration portal, affecting its military-affiliated student population [16] Company Strategy and Development Direction - The company is focusing on enhancing student experiences through investments in technology and marketing adjustments aimed at improving student retention and academic outcomes [8][13] - Recent acquisitions of DigitalCrafts and Hippo Education are expected to expand the company's non-degree portfolio and provide growth opportunities [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the prolonged pandemic has impacted student engagement, with some students pausing their academic programs [12] - There is cautious optimism regarding enrollment trends, with positive signs observed in September and October sessions [12] Other Important Information - The company ended the quarter with 481 million in cash and equivalents, an increase of approximately 70.6millionoveryear−end2020[30]−CapitalexpendituresforQ3wereapproximately70.6 million over year-end 2020 [30] - Capital expenditures for Q3 were approximately 3.2 million, with expectations to maintain around 2% of revenues for full-year 2021 [33] Q&A Session Summary Question: Adjustments to marketing and admissions - Management explained that adjustments were made to marketing expenses to better target prospective students, with a focus on those likely to succeed [44][46] Question: Enrollment softness and its causes - Management acknowledged that external factors, including financing and pandemic-related issues, have led to delays in students' decisions to start classes [49] Question: Impact of academic calendar redesign - The positive enrollment growth at CTU was significantly attributed to the academic calendar redesign, although exact impacts without the redesign were not calculated [52][53] Question: Profitability of recent acquisitions - The recent acquisitions are expected to be cash flow neutral or slightly positive, but specific EBITDA information was not disclosed [54][55] Question: Fourth-quarter guidance and revenue timing - Management indicated that the fourth-quarter guidance reflects potential timing differences in revenue recognition, particularly influenced by the academic calendar [57][59]