Perdoceo Education (PRDO) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2021, the company reported net income of $26.6 million or $0.37 per diluted share, while adjusted earnings per diluted share was $0.41, unchanged from the prior year [7][15] - Total company revenue for the quarter was $175.5 million, slightly lower than the prior year revenue of $176 million [17] - Adjusted operating income totaled $42.3 million for the quarter, reflecting an increase of 1.8% versus the prior year [15] Business Line Data and Key Metrics Changes - At CTU, total student enrollments increased by 14.2% due to an academic calendar redesign, with revenue increasing by 1.8% to $102 million [9][18] - At AIU, total student enrollments decreased by 1.8%, with revenue declining by 3.4% to $73.2 million, primarily due to lower enrollments at Trident [9][18] - Corporate and other segments reported operating losses of $8.7 million, an increase from $6.2 million in the prior year [19] Market Data and Key Metrics Changes - The prolonged pandemic has impacted overall student engagement, with some students deferring their decisions to start classes [6][7] - The company believes the changes in student behavior may be temporary, influenced by the economy's reopening and stimulus packages [7] Company Strategy and Development Direction - The company executed a strategic acquisition of DigitalCrafts to diversify revenue away from federal student financial aid funding and extend academic program offerings [8][24] - Investments in technology and student-serving functions are seen as key drivers for total enrollment goals [11][12] - The company is focusing on expanding corporate partnerships and workforce development training programs [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the academic value proposition resonating with nontraditional students, particularly adult learners [13] - The outlook for full-year adjusted operating income remains unchanged in the range of $165 million to $171 million, with adjusted earnings per diluted share expected between $1.58 and $1.64 [22] Other Important Information - The company ended the quarter with approximately $480.7 million in cash and equivalents, an increase of about $70.3 million over year-end 2020 [21] - The company repurchased approximately 440,000 shares during the quarter [21] Q&A Session Summary Question: Impact of DigitalCrafts acquisition on revenue - Management confirmed that the acquisition will positively impact revenue for the third quarter and full-year, although specific numbers were not disclosed [29] Question: Details on workforce development programs at Trident - Management reported over 100 students enrolled in the seven launched programs, with positive initial responses [31] Question: Relocation of Colorado Springs campus at CTU - The decision to relocate was made to upgrade to a better facility and take advantage of favorable lease rates [34] Question: Clarification on borrower defense to repayment claims - Management indicated that there are numerous claims covering a long time period, and each must be responded to, leading to legal fees [36]