Perdoceo Education Corporation

Thank you for joining today's Prodecio Education Corporation second quarter earnings conference call. My name is Dante and I'll be your operator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, it is star one on your telephone keypad. I would now like to pass the conference over to our host, Mr. Davis Snyder with Investor Relations. Mr. Snyder.

Thank you, Dante. Good afternoon, everyone, and thank you for joining us for our second quarter 2022 earnings call. With me on the call today is Todd Nelson, Executive Chairman, Andrew Hurst, President and Chief Executive Officer, and Ashish Gia, Chief Financial Officer. This conference call is being webcast live within the Investor Relations section at ProdocioED.com. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for investor relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions made by and information currently available to Prodocio Education, and involved risks and uncertainties that could cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include but are not limited to those factors identified in Prodocio's annual report on Form 10-K for the year ended December 31, 2021, and subsequent filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments, or changed circumstances, or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The earnings release that accompanies today's call contains financial and other quantitative information to be discussed today, as well as a reconciliation of the GAAP to non-GAAP measures, and is available within the investor relations page of the company's website. With that, I'd like to turn the call over to Andrew Hurst. Andrew?

Thank you, David. Good afternoon to everyone, and thank you for joining us. Overall, we are pleased with our operating results. and continued progress during the quarter. I would like to thank our faculty, student support staff, and all our other employees for their hard work, dedication, and diligence in serving and educating our students. We continue to invest in technology upgrades and maintain appropriate levels of academic and student support services that we believe are positively impacting academic outcomes and student experiences. Second quarter operating results came in ahead of our expectations in part due to better than expected improvements in student engagement as overall macroeconomic and governmental responses generally wind down from the pandemic. Let me touch upon some of the key operational highlights from the quarter. First, while student engagement continues to show progress from the pandemic era lows, We continue to see some students pause their academic programs or decide not to begin classes, which impacted total enrollments for the end of the second quarter. We still expect total enrollments to be lower for the full year as compared to the prior year. Second, and as a reminder, beginning in the third quarter of 2021, we made adjustments to our marketing processes to further improve our focus on identifying prospective students who are more likely to succeed at one of our universities. While these adjustments will negatively impact total student enrollments during 2022, in the long run, we believe they should further enhance student experiences, retention, and academic outcomes. Lastly, effective July 1st, we completed the acquisition of substantially all the assets and academic programs of California Southern University originally accredited university. Cal Southern offers non-title IV online associate, bachelor's, master's, and doctoral degree programs with a focus primarily in psychology, business management, and risk management. Ashish will provide more details around this acquisition shortly. Now let me touch upon some of the financial results for the second quarter. We reported net income of $25.8 million, or 37 cents, per diluted share, while adjusted earnings per diluted share, which excludes certain significant and non-cash items, was 42 cents. As expected, total student enrollments declined in the second quarter, with total student enrollments 7% lower as compared to the prior year quarter end. Total student enrollments decreased by 14.5% at the AIU system and 2.3% at CTU. Student engagement continues to improve and changes to the marketing processes will annualize beginning in the third quarter. As a result, we expect the rate of decline in student enrollments to lessen for the remainder of the year. During the quarter, we continue to prioritize our efforts to enhance our academic offerings and student experiences. We are making necessary investments to upgrade our student-serving technology and continue to leverage data analytics and machine learning to provide timely and relevant engagement with our students. Our chat bots at AIU and CTU are one such example and are now being used throughout the student academic cycle, beginning with student onboarding enrollment and continuing through to students in the classroom. We believe these investments are resulting in increased levels of engagement across our academic institutions. In addition, We are continuing to maintain proper staffing levels to ensure our students are receiving appropriate support at all stages of their education journey. With that said, I would now like to turn the call over to Ashish for a deeper review of our operating performance for the quarter.