Perdoceo Education (US:PRDO)2024-05-02 00:08Financial Data and Key Metrics Changes - First quarter operating income was $46.3 million, an increase of $2.9 million compared to the prior year, primarily driven by approximately $30 million in lower expenses [13] - First quarter revenue decreased by 14% to $168.3 million from $195.6 million in the prior year, attributed to fewer revenue earning days and lag impact from operational changes [20] - Net income for the first quarter was $39.4 million or $0.59 per diluted share, compared to $34.5 million or $0.50 per diluted share in the prior year [19] - Adjusted earnings per diluted share was $0.60, slightly up from $0.58 in the prior year [19] Business Line Data and Key Metrics Changes - Revenue at CTU decreased by 8.8% to $113.6 million, with operating income at $42.2 million, down from $43.7 million [24] - AIU System's revenue was $54.5 million, a decline of 23.1% compared to the prior year, with operating income of $9.3 million, down by $2.7 million [25][26] - Total student enrollments for CTU increased by 28.5%, while AIU System experienced a decline of 22.9% [22][48] Market Data and Key Metrics Changes - Total enrollments for the first quarter were approximately 30% higher than the low point in the fourth quarter of 2023 [23] - The academic calendar at CTU is expected to have a negative impact on revenue during the first half of 2024, with a more normalized second half [24][36] Company Strategy and Development Direction - The company is focused on investing in technology and improving processes to enhance student experiences and academic outcomes [46][38] - Capital allocation strategy prioritizes investments in organic projects and technology initiatives, while also evaluating acquisitions [31][38] - The company expects to continue share repurchases as part of its long-term capital allocation strategy [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong levels of student retention and engagement, expecting these trends to persist through 2024 [42][43] - The outlook for full year 2024 adjusted operating income is now expected to range between $175 million and $190 million, reflecting better than expected performance in the first quarter [6] - The company anticipates revenue growth in the second half of 2024, particularly in the fourth quarter, as the lag impact on revenue at AIU System moderates [21][34] Other Important Information - The company recorded a provision for income taxes of $13.4 million, resulting in an effective tax rate of 25.4% for the first quarter [28] - Capital expenditures for the first quarter were approximately $1.2 million, with expectations for the full year to be between 1% to 2% of revenues [51] Q&A Session Summary Question: What are the expectations for the second quarter of 2024? - The company expects adjusted operating income to be in the range of $48 million to $50 million, compared to $55.2 million in the prior year quarter, with adjusted earnings per diluted share ranging between $0.57 and $0.59 [35]